Face­book on a roll as ad­ver­tis­ing jumps 50%

The Star Early Edition - - INTERNATIONAL - David In­gram, Rishika Sadam

FACE­BOOK’S Famo­bile ad­ver­tis­ing busi­ness grew by more than 50 per­cent in the sec­ond quar­ter, the com­pany said in its earn­ings re­port on Wed­nes­day, as the so­cial net­work con­tin­ued to es­tab­lish it­self as the venue of choice for an ever-grow­ing ar­ray of on­line ad­ver­tis­ers.

Shares in Face­book, owner of four of the most pop­u­lar mo­bile ser­vices in the world, rose more than 4 per­cent to about $173 (R2 251.43) in af­ter-hours trad­ing. By Wed­nes­day’s close, the stock price had climbed nearly 44 per­cent this year.

Face­book, which now has more than 2 bil­lion reg­u­lar users, has been squeez­ing more ads into its Face­book News Feed while adding more ads to its photo-shar­ing app In­sta­gram, which has more than 700 mil­lion users.

With money cas­cad­ing from those two ser­vices, chief ex­ec­u­tive Mark Zucker­berg said the com­pany was turn­ing at­ten­tion to mon­etis­ing its two mes­sag­ing ser­vices, Mes­sen­ger and What­sApp, which have more than 1 bil­lion users each.

“I want to see us move a lit­tle faster here, but I’m con­fi­dent that we’re go­ing to get this right over the long term,” Zucker­berg said in a con­fer­ence call with an­a­lysts.

The com­pany also is ac­cel­er­at­ing its push into video, an ef­fort aimed at tak­ing ad­ver­tis­ing dol­lars from the tele­vi­sion in­dus­try and in­creas­ing the time peo­ple spend on Face­book.

Within weeks, Face­book is ex­pected to start a video ser­vice that will in­clude scripted shows, a sharp change for a busi­ness built on user-gen­er­ated con­tent.

Pos­si­bil­i­ties

Zucker­berg said video would be a sig­nif­i­cant driver of Face­book’s busi­ness in the next two to three years.

With those pos­si­bil­i­ties still on the hori­zon, Face­book said to­tal rev­enue rose 44.8 per­cent to $9.32 bil­lion in the sec­ond quar­ter of the year. That beat the av­er­age fore­cast of $9.20bn among an­a­lysts tracked.

Growth was even steeper in mo­bile ad­ver­tis­ing, which in­creased to nearly $8bn.

“In mo­bile we’re con­tin­u­ing to see great strengths,” Face­book chief fi­nan­cial of­fi­cer David Wehner said. “We’re see­ing more and more ad dol­lars get­ting al­lo­cated to mo­bile, and we think that trend will con­tinue.”

Mo­bile ad rev­enue ac­counted for 87 per­cent of the com­pany’s to­tal ad­ver­tis­ing rev­enue of $9.16bn in the lat­est quar­ter, up from 84 per­cent a year ear­lier.

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