Facebook posts slowest growth in two years
Facebook posted its slowest growth in quarterly revenue in two years as higher spending on research and development ate into profits.
Shares of the world's largest Internet social network fell 2pc in after-market trading yesterday.
Facebook has warned of heavy investments in 2015 as it steps up efforts to expand a collection of products that include messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift.
As a result, Facebook's operating expenses rose 83pc in the first quarter as R&D costs jumped 133pc and marketing and sales spending nearly doubled.
However, Facebook said monthly active users grew 13pc over a year ago to 1.44 billion, with 87pc of them accessing its service on smartphones and other mobile devices.
Blaming constant changes in foreign exchange rates, Facebook reported revenues of $3.54bn for the period, a 42pc increase year-over-year. This came in just below analysts' estimates of $3.56bn for the social media giant.
"It's a generally solid quarter. The trends are all going in the right direction. The cost rise is one thing that can derail this story," said Macquarie Research analyst Ben Schachter.
"The question is, can they keep costs under control and what will be the new revenue streams around video, Instagram and virtual reality around Oculus?" he said.