IS FACEBOOK’S SOARING PROFITS DEMONSTRATING ON THE MOBILE COMPUTING WAVE?
In today’s fast paced world, facebook is a popular free social networking website that allows registered users to create profiles , upload photos and video, send messages and keep in touch with friends, family and colleagues and even posts ads which is beneficial for entrepreneurs. If you haven’t heard about facebook then you must be in a coma for the past five years.
Once again demonstrating its mastery on the mobile computing wave, facebook dazzled Wall Street by posting significant growth in revenue and profits, driven largely by ads shown in the news feed of a billion users checking the service on the mobile phones itself. Facebook based in Menlo Park, California said it had about 1.32 billion monthly users around the world in June, with more than a billion of those people using the service at least partly on mobile phones.
Revenue was $2.91 billion upto 61 percent from $1.81 billion during the same period last year. Net income was $791 million or 30 cents a share, compared with $ 333 million or 13 cents a share, a year ago. The company’s operating profit margin hit a record 48 percent in the second quarter, reflecting increased cost efficiencies.
Mobile devices accounted for nearly two thirds of facebooks revenue which at this point mostly comes from ads shown on the facebook web site & apps. However the company is beginning to supplement that with ads on other sites. Analysts had expected facebook to report revenue of $2.8 billion.
Wall Street had also projected that the company would post a profit of 32 cents a share after excluding compensation- related expenses according to consensus estimates collected by several services. Facebook now represents about 20% of total time spent on mobile devices according to research firm com Score data.
The sharp rise in pricing was the result of an increase in the proportion of newsfeed ads, which generally command higher pricing relative to other formats and the decline in impressions was due to an increase in mobile usage, Macquarie Research analyst wrote.
Facebook shares hit their previous records high of $72.59 on March 11, 2014.
Once long-running concern is whether facebook users are tiring of the service and turning to other apps.
AUTHOR : AMRITA POOJARI
PUBLISHED BY : JASNEET SETHI
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