Saturday 24 February 2018

Facebook's financial thumbs up as users stay addicted

Facebook is growing on all fronts, shown by its second-quarter results (AP)
Facebook is growing on all fronts, shown by its second-quarter results (AP)

Adrian Weckler Technology Editor

Facebook is showing little sign of relinquishing its hold on the title of the world's dominant social media network after it posted robust quarterly financial and user activity figures.

Its most watched user metric - 'monthly active users' - grew 13pc to 1.49 million. Its daily active user figure rose to 968 million people.

The company, which employs over 900 people in Dublin, also posted a profit of $719m (€659m) in the last financial quarter while revenue rose 39pc to $4.04bn (€3.7bn). Facebook's operating margin, a measure of profitability, narrowed to 31pc from 48pc.

The company still makes the bulk of its income in the US, with the average American user yielding $9.30 (€8.52) in advertising and other service fees compared to $3.36 (€3.08) for European users and $1.90 (€1.74) for Asian users.

The company's users are gradually switching over to phones to access the service, with 76pc of ad revenue now coming from mobile phones. Mobile monthly users now count for 1.31 billion of the 1.49 billion overall users and mobile daily users grew 6pc to 844 million. Those who use Facebook on their phone every day now number 968 million across the world, up 3.4pc.

Facebook's other social media properties are also performing strongly with messaging service WhatsApp recording 800 million monthly active users and Facebook Messenger, which is now largely running as a separate service, recording 700 million monthly active users. Instagram, which Facebook also owns, recorded 300 million monthly active users.

Spending climbed 82pc in the second quarter as the social-media company increased hiring, poured money into data centres and boosted marketing. While that was more than double the rate of sales growth, Facebook still managed to top most analysts' revenue estimate, crossing the $4bn (€3.66bn) mark for the first time.

Chief executive Mark Zuckerberg has made it clear to investors that he plans to continue investing in new features and products, such as virtual reality and artificial intelligence.

Even with a base of 1.49 billion users, Zuckerberg contends that the company's biggest days are ahead, as more people connect to the internet and each other, using what's evolved out of the social network he started in a Harvard University dorm room in 2004.

"Now it's mostly visual and photos," he said. "We are entering into a period where that's going to increasingly be primarily video, and we're seeing huge growth there.

"But that's not the end of the line... There's always a richer way that people want to share and consume thoughts and ideas, and I think that immersive 3D content is the obvious next thing after video."

He said that Facebook's investments in virtual reality will pay off once social networking moves to a more visual medium. Facebook bought Oculus for $2bn (€1.83bn) last year.

Irish Independent

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