Second Quarter Results Boost Facebook Shares
Facebook continues to redeem itself with investors after its much-publicized, debated and, some might say disastrous, IPO in May 2012. The company’s second quarter results reveal that Facebook continues to increase its overall user base, with its mobile users increasing by 51 percent over the last year. It’s this market that Facebook has been focusing on for advertising, clearly with much success. Of Facebook’s $1.81 billion in revenue, $1.6 billion came from advertising, being an increase of 61 percent from last year. Up to 41 percent of the advertising revenue came from mobile devices. The balance of the revenue was derived from payments (most notably game payments) and other fees. Facebook shares climbed by 19 percent in afterhours trading on Wednesday night, closing at $31.81, which is still below the May 2012 price of $35.
The second quarter report notes that 1.15 billion users access Facebook monthly, with the daily user figure hitting 699 million, being a 27 percent rise over the second quarter of 2012. The social networking giant boasts more than a million active advertisers, and up to five million videos were uploaded on Instagram on its launch day. Earlier in the week Facebook reported that it has 100 million monthly users on its app dubbed “Facebook for Every Phone”.
With an increasing number of consumers accessing internet services on smartphones, companies had to rethink their advertising campaigns to suit the smaller screens on these devices. Over the past year Facebook has introduced marketing messages that display in the user’s newsfeed, giving advertisers targeted access to millions of users every day.
While there has been some speculation that Facebook would lose ground to other social networks, such as Snapchat and WhatsApp, there is no indication of this happening. The concern that in-feed ads would alienate viewers was also laid to rest by Facebook’s better-than-expected results.