Facebook Optimistic As Mobile Ad Revenues Soar

The social network is celebrating “another strong quarter” – with 76% of its advertising revenue now coming from mobile devices.

Facebook has enjoyed “another strong quarter” of growth – despite quarterly profits falling by 9%.

The social network has been investing heavily in mobile advertising, and the development of two recent acquisitions: the photo-sharing app Instagram and the WhatsApp messaging service.

Costs and expenses at the company reached $2.77bn (£1.8bn) in the three months to June – an 82% increase compared to the same period a year ago.

Even though Facebook’s revenues have exceeded analysts’ expectations, jumping from $2.91bn (£1.86bn) to $4.04bn ($2.59bn), shares in the social network still fell in after-hours trading by 4.2%.

The company had warned that profit margins could be dampened by its investment strategy, but analysts do believe this will help create significant revenue streams in the coming years.

A push towards mobile platforms is already paying dividends for Facebook.

Adverts on mobile devices now account for 76% of Facebook’s advertising revenue, compared to 62% in the second quarter of 2014.

And video adverts, dominated by Google, the owner of YouTube, have also been Facebook’s fastest-growing category of internet advertising.

According to Facebook, it had 1.49 billion monthly active users as of 30 June, an increase of 13% in the space of 12 months. Of these, 1.31 billion are using the service on mobile devices.

When trading closed in New York on Wednesday, Facebook’s share price stood at $96.99 (£62.15), which means the company is now valued at $276.4bn (£177bn).

Facebook’s financial results come a day after Twitter confirmed it was still struggling to add users, even though its revenue for the second quarter was also above analysts’ expectations.

Twitter has 316 million monthly active users, barely a fifth of its rival.

The site’s co-founder, Jack Dorsey, has admitted the company is “not satisfied with our growth in audience” and is plotting a massive overhaul of the service which could see it looking a lot more like Facebook.

Chief Financial Officer Anthony Noto has also conceded that many people simply find the social network too difficult to use.

Tagged , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: