Mobile video ads boost Facebook
Facebook churned out fasterthan-expected quarterly sales growth from its main social network, fueled by continued strength in mobile video advertising.
Instagram, the company’s popular photo-sharing app, also helped second-quarter sales climb 45 percent to $9.3 billion, the Menlo Park company said Wednesday. Analysts projected $9.2 billion.
Facebook’s social network, now with 2.01 billion monthly active users, is steadily driving revenue at a faster pace than at other technology giants. That consistency, which executives have warned may not last, funds the company’s efforts in chat applications and virtual reality, which may take years to contribute meaningfully to revenue. To keep up growth, Facebook has been heavily investing in video.
“Facebook and Google are taking virtually all the growth in digital advertising — they’re the easiest place to spend your money,” said Brian Wieser, an analyst at Pivotal Research Group.
Facebook shares were slightly up in extended trading after closing at $165.61 in New York, topping the company’s record high of $166 on Monday.
Net income rose to $3.9 billion, or $1.32 a share, from $2.3 billion, or 78 cents, a year earlier.
Facebook’s video advertising business has helped drive sales for the last few quarters; now the company is getting into content, too. Facebook has funded TV-like shows and short video series for a new product set to come out in midAugust, people familiar with the matter have said. The effort
will help Facebook gain a share of the $70 billion television advertising market.
In the main Facebook news feed, the company said it would stop increasing the frequency of ads shown to avoid turning off its users. For more ad inventory, the company is relying on Instagram, the photo-sharing application. Now with more than 700 million users, Instagram has a mature advertising business, built off of Facebook’s.
The revenue beat comes as CEO Mark Zuckerberg is talking about the company’s broader role in society, especially as isolationist and nationalist movements spring up around the world. Facebook has been criticized for the spread of extremism and false news on its social network.