Facebook’s next money-makers
Facebook’s quarterly profit and revenue blew past Wall Street estimates, sending its shares to a record high as the social media company’s popular mobile app and push into video attracted new advertisers and encouraged existing ones to spend more.
Net income attributable to Facebook’s stockholders rose to US$2.05 billion ($2.88b), compared with US$715 million a year earlier. Total revenue rose 59.2 per cent to US$6.44b, ahead of analysts’ average estimate of US$6.02b.
Facebook shares rose 6.5 per cent in after-hours trading yesterday to US$131.40 — its highest since the company went public in 2012.
Total advertising revenue surged 63 per cent to US$6.24b, beating the average analyst estimate of US$5.8b, according to market research firm FactSet StreetAccount. The company also saw strong growth in monthly active users, now boasting 1.71 billion as of June 30, up from 1.49 billion a year earlier.
David Wehner, Facebook’s chief financial officer, pointed to AsiaPacific, as one of the most promising areas for continued user growth.
Asia-Pacific “has been a consistently good performer for us over the last several quarters and we will continue to invest our global sales resources to drive opportunities there”, Wehner said in an interview with Reuters.
Most of Facebook’s revenue comes from mobile advertising — a machine that continues to churn out sales results that beat analysts’ estimates. But it won’t always be that way.
There are other properties and features — like WhatsApp and Messenger, chat apps which both have 1 billion users — that aren’t yet generating money. They may be formidable revenue drivers, but the company is taking its time revealing how that will happen.
But here’s what we know, based on the company’s most recent commentary: photos of vacations and trending news, sorting through 2.5 trillion posts on the network.
Chief executive Mark Zuckerberg said the product will have three phases. First, consumers will learn to love using it. Second, they’ll naturally start to interact with businesses on it. Third, Facebook will let businesses pay to reach more people.
“Certainly there’s a reasonable amount of behaviour in there which is looking for things that, over time, could be monetisable or commercial intent, and at some point we will probably want to work on that,” Zuckerberg said.
Sarah Frier