Facebook reports Boom in Revenue after buoyed mobile Ads

 

Facebook earnings report

The Facebook CEO, Mark Zuckerberg is back to business after taking a two month off work to spend good time with his new-born daughter.

Facebook being the Zuckerberg’s social networking company reported another quarter of boom in revenue. The company said that sales in the fourth quarter of 2015 increased 52%, amounting to $5.84 billion, while profit increased to $1.56 billion. That is doubling from $701 million a year ago. Meanwhile the company reports $3.69 billion in profit on $7.93 billion in revenue for the full year. That is a whooping increase of 44% from 2014.

facebook earnings report

Photo Credit: New York Times

This number is by far more than the Wall Street’s fourth-quarter expectations of $1.2 billion in profit of $5.37 billion in revenue. This has made investors to push up Facebook stock more than 12% in after hours of company trading.

This success result is attributed to Facebook numerous sales in Mobile device advertisements. It’s really a good business since Facebook was not even into mobile ad placement a few years ago. Today, mobile ads has made up 80% of Facebook’s total ad business in the 4th quarter when compare with the 23% in the same quarter of 2012.

This report alone should be giving a green light alert to the American technology stocks. Well twitter, being Facebook’s biggest social networking competitor in the united states have fallen more than 55% during the last year, while Yelp, the local review service crushed about 60%, and LinkedIn tumbling by 15%.

Also Read: The 26 Big Tech predictions of 2016

Facebook to everyone is still a large company when comparing it to its peers, yet it is able to keep its growth standard rate high. As the company as seen a double-digit jump in its ad revenue and in the expansion of its global user base, Facebook now has about 1.59 billion monthly visitors, amounting to 14% from a year ago. About 1.44 billion of Facebook users visit the site with a mobile device; and about 1.04 billion users visit Facebook every day.

This growth in Facebook earnings report engine has given Facebook the opportunity to play in different areas such as:

  • Virtual reality.
  • Messaging.
  • Building drones capable of delivering Internet service to far-flung places around the world.

You should know it that Facebook is spending a lot of billions of dollars developing those projects, and Mr. Zuckerberg has many times said that the company has no plans to make money through them in the near term.

still on Facebook earnings report, David Wehner, Facebook’s chief financial officer in an earning call with investors, said that the company has projected that expenses is going to increase at roughly 30-40% in 2016 compare with 2015.

An example of this spending is on Oculus, Facebook’s $2 billion bet on bringing virtual reality to the mainstream. This virtual reality unit will begin selling its first headsets to consumers in March 2016. Also, Facebook has said it got plans to sell “Rift” the hardware. As a result of loss to helping the technology catch on with a larger audience.

“These are long-term bets on this, and we don’t think they’re particularly large bets relative to the current size of Facebook,” said Ben Schachter, an Internet analyst at Macquarie Securities. “They’ve gone out of their way to say they’re not Google and going after health care, for instance.”

We foresee a potential for profit if Facebook can monetize the Facebook Messenger and Whatsapp having seen the hundreds of Millions of users who regularly use them. So the idea of introducing Whatsapp for Business is a very lucrative idea.

Also, Instagram, the photo sharing platform with over 400 million regular monthly users also got the potential to become a significant source of revenue in the nearest future. Though the company does not disclose what portion of revenue Instagram accounts for in Facebook’s overall sales, its believed that Instagram is going to be another big source of revenue for Facebook. Ms. Sandberg said 98 of the list of top 100 advertisers on Facebook also advertised on Instagram in the last quarter on 2015.

 

As for Mr. Zuckerberg, (now a father), he spent a portion of the investor call on Wednesday 27th January 2016 talking about his new role as a father to his daughter, Max.

He said “With a new addition to my family, I’ve been reflecting a lot on the legacy we want to pass on to the next generation,” he said, adding that he wanted Facebook to “continue to focus in solving the fundamental challenges that is facing the world, and bringing the whole world closer together.”

This facebook earnings report is rooted to NY times.

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