Face­book rides mobile wave to boost prof­its, user base

Kuwait Times - - TECHNOLOGY -

SAN FRAN­CISCO: Face­book said surg­ing mobile ad­ver­tis­ing lifted its prof­its and rev­enues as the world’s big­gest so­cial net­work grew to over 1.5 bil­lion peo­ple.

Net profit in the third quar­ter jumped 11 per­cent from a year ago to $891 mil­lion as rev­enues leapt 41 per­cent to $4.5 bil­lion, de­spite the neg­a­tive im­pact of a strong dol­lar. The vast ma­jor­ity was from ad­ver­tis­ing, and mobile ac­counted for 78 per­cent of ad rev­enues in the quar­ter, com­pared with 66 per­cent a year ear­lier. “This was an­other good quar­ter and we con­tinue to grow the size and en­gage­ment of our com­mu­nity,” said chief ex­ec­u­tive Mark Zucker­berg on a con­fer­ence call.

“More than one bil­lion peo­ple use Face­book ev­ery day.” Face­book said the num­ber of monthly ac­tive users of the net­work hit 1.55 bil­lion, up 14 per­cent from a year ear­lier. And it counted some 1.39 bil­lion of its mem­bers us­ing mobile de­vices such as smart­phones or tablets.

The stronger-than-ex­pected earn­ings re­port sparked a gain of 3.7 per­cent in Face­book shares in af­ter-hours trade to $107.73. An­a­lysts say Face­book has be­come an on­line ad­ver­tis­ing jug­ger­naut as it lever­ages its huge base to ex­pand into other ap­pli­ca­tions such as In­sta­gram and What­sApp, and delve into vir­tual re­al­ity projects through its ac­qui­si­tion of Ocu­lus. Zucker­berg said that “with Ocu­lus we’re in a great po­si­tion to de­liver a new gen­er­a­tion of shared im­mer­sive ex­pe­ri­ences” and noted that its Rift head­set would be on sale early next year.

“Vir­tual re­al­ity has the po­ten­tial to be the next com­put­ing plat­form that changes all of our lives,” he added. “It’s im­por­tant also to rec­og­nize that this is go­ing to grow slowly like com­put­ers and mobile phones when they first ar­rived, so we’re com­mit­ted to Ocu­lus and vir­tual re­al­ity for the long term.”

Grow­ing mobile ads

Ac­cord­ing to the re­search firm eMar­keter, Face­book ac­counted for eight per­cent of world­wide dig­i­tal ad rev­enues in 2014 and is ex­pected to reach 9.6 per­cent by the end of this year.

Google is ex­pected to re­main the mar­ket leader with a 30.4 per­cent share this year, down from 32 per­cent last year, eMar­keter es­ti­mates. In mobile, Face­book’s share of dig­i­tal ad rev­enues this year is ex­pected to be around 17.4 per­cent in a mar­ket worth some $72 bil­lion.

Chief financial of­fi­cer David Wehner told the con­fer­ence called that “we have been very pleased by the sus­tained high growth of mobile ad­ver­tis­ing rev­enues,” adding that this has been able to grow with­out hurt­ing “user sat­is­fac­tion.”

He added that the com­pany sees healthy growth op­por­tu­ni­ties ahead for Face­book and In­sta­gram but that rev­enues may be hit by cur­rency fac­tors. Face­book re­cently ramped up its abil­ity to search its trove of on­line post­ings, step­ping up its bat­tle against Google in the on­line search do­main and against Twit­ter and oth­ers to be the key source of news and con­ver­sa­tions about news top­ics.

Face­book is also test­ing a shop­ping tab for its mobile app to get deeper into on­line com­merce. It will be­gin test­ing a Shop sec­tion where peo­ple can “dis­cover, share, and pur­chase” prod­ucts. Face­book has also tested “Buy” but­tons to stream­line pur­chases at the so­cial net­work.

The Cal­i­for­nia gi­ant is among those fac­ing pos­si­ble le­gal is­sues in Europe af­ter a court rul­ing in­val­i­dated a le­gal agree­ment on cross-bor­der data trans­fers due to pri­vacy con­cerns. — AFP

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