Facebook Q3 Results Strong; Hits 1 Billion Monthly Active Mobile Users

The transition has already begun, as in the last two months Facebook introduced a live streaming feature into its mobile Messenger app, as well as an Instagram Stories-like feature for ephemeral content called Messenger Day. And that means you’re also more likely to see video ads. It’s also dabbling with a game service similar to Steam, and its Instragram service just topped 500 million users. The strategy seems to be working. General Motors, for example, launched its electric Chevy Bolt EV through Facebook Live this year.

Increasing ad load – the number of ads on the website – has been one of three main factors of Facebook’s growth, along with user growth and increasing time spent on the platform, Facebook’s chief financial officer David Wehner said on Wednesday. “But all of these things are going to be part of a cohesive experience to get behind our community”. It marks the fourth straight quarter that Facebook has beaten Wall Street’s projections, after January, April and July. So far, the power couple of Google and Facebook have gobbled just about all the money in digital advertising, including video.

Despite Facebook reporting 56 percent revenue growth and 200 million more monthly users, the company’s stock plunged by 8 percent as Facebook’s future profitability looks grim.

Facebook reported a 55.8 per cent rise in quarterly revenue, to US$7.01 billion, beating analysts’ average estimate of US$6.92 billion, according to Thomson Reuters I/B/E/S. Zuckerberg said the company now has more than 40 teams and more than 25% of its engineers using AI to underpin the products they’re building.

Mobile ads accounted for 84 per cent of Facebook’s total advertising revenue of US$6.82 billion in the third quarter that ended September 30, compared with 78 per cent a year earlier. The profits too, were better than expected as the company posted a profit of $1.07 per share than compared to the expected profit of 97 cents per share.

That figure was up 56% on the same period past year and higher than the 6.92 billion (£5.6bn) predicted by analysts.

Facebook and Snapchat have an equal share of mobile app user share in the 10 to 15 age group, according to Newzoo research cited by eMarketer. Similarly, numerous first mobile video ads were TV ads dropped into mobile.

Technology has only recently improved to the point where mobile video is practical, allowing people to generate and consume videos without unacceptable buffering and wait times, Zuckerberg said.

The number of people accessing Facebook from mobile devices monthly climbed 20 per cent to 1.66 million. Facebook has over 4 million active advertisers and over 60 million active SMBs of which 85% are active on mobile.

Traditional, on-demand video “is the vast majority of video that is both shared and consumed on Facebook”, Zuckerberg said. Down the road, expect ads on the messaging service WhatsApp, or on Oculus Rift, its virtual reality headset. Mobile ad revenues contributed 84% of total advertising revenues, up from 70% in the same period previous year. Average price per ad increased 6% from the year-ago quarter.

There have been some hurdles.

There’s a good reason why Facebook’s mobile business is bigger than ever.