Facebook profit surges, closing in on two billion monthly users
Monthly active users (MAUs) were 1.94 billion as of March 31, 2017, an increase of 17 per cent year-over-year.
Facebook shares slipped as low as $145.45 in extended trading following the report, after declining less than 1 percent to $151.80 at the close in NY.
Facebook on Wednesday said first-quarter profit surged 76% to $3.06 billion, allaying concerns that questions over video-ad performance and the spread of violent and graphic content would mar growth. Last month, the social media giant was heavily criticized for hosting a video of a Thai man killing himself and his instant daughter. The majority of the company’s revenue is still being driven by advertisers though, something Facebook itself admits will soon start to decline.
This is not the first time Facebook has been accused of using research it has harvested from its billion-plus users to increase its profits. It remains to be seen whether Snapchat will manage to come up with a viable answer to Facebook’s aggressive product strategy, though recent reports indicate that the firm doesn’t have any reason to worry about its core user base leaving, though its growth is certainly suffering due to Facebook’s recent endeavors. Ad load is the number of ads on the website.
Revenue soared 49% to $8.03 billion, easily coasting past analyst consensus of $7.83 billion.
That would give Facebook a 22.6 percent share of the worldwide mobile ad market, with archrival Google of Alphabet Inc projected to be the leader with a 35.1 percent share, eMarketer said. They need to figure out how to grow their revenue numbers fast enough to satisfy investors’ demands.
Two-thirds of Facebook’s monthly active users visit Facebook every day, the company said. Snapchat held its IPO on February 2, and after that, Facebook introduced a copycat feature into Messenger and WhatsApp by adding the Stories function.
Meanwhile, expenses are expected to surge 40 per cent to 50 per cent compared with past year as Facebook invests in data centers, research and more, he said.
Apple, Microsoft, Snap, Magic Leap among other platforms are working towards putting Augmented Reality in people’s daily lives, in reality, besides Facebook.
Overall advertising revenue for the quarter was up 51% year on year to $7.9bn, but chief financial officer David Wehner warned that Facebook was hitting a limit on the number of ads it could carry. Facebook uses the investor.fb.com and newsroom.fb.com websites as well as Mark Zuckerberg’s Facebook Page (https://www.facebook.com/zuck) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
If successful, these “ad breaks” will help Facebook convince publishers to create longer videos without the platform paying them outright, executives said. As earlier, Facebook has also announced that its Instagram app has 700 Million active users. However, Facebook was able to sprint ahead of Snapchat and beat it at its own game, given its vast user base, stable profits and good terms with developers.