The social media giant has crushed expectations with a 53% increase in revenue
Mark Zuckerberg updated his own Facebook just a few hours ago, updating the community with news that Facebook is doing better than ever. With an increase in number of active users to about 1.2 billion and 65 million businesses online, Facebook has successfully consolidated its lead in the digital world.
Crushing predictions with unexpected results
Facebook had a quarterly profit of $3.57 billion, double from the previous $1.56 billion. This result went against the expectations of many analysts, especially after their debacle with “fake news”, inaccurate advertising calculations and their loss to ZeniMax Media Inc. for the violation of a non-disclosure agreement.
Analyst Michael Pachter reflected that the growth has been “impressive”, with a 57% growth in 2016 and a current model that “only” expects 38% revenue growth in 2017. The rate of growth will eventually slow down or even plateau, but actual growth will stay resilient at high levels.
Ad growth would also slow down due to the ad load limitation, which is the total number of ads Facebook can show to their users. This was still insignificant, at least for now, as total revenue in the 4th quarter increased from $5.84 billion to $8.81 billion this year.
Strength in mobile leads the way
Mobile advertising took the largest share of the success, accounting for 84% of ad revenue—a 4% increase from last year. 90% of Facebook users access their accounts through their mobile phones with mobile daily activity rising by 23%.
With Messenger, WhatsApp and Instagram in the hands of Facebook, there is no limit to the expansion of Facebook’s reach to a wider range of users.
What’s up ahead
Video is becoming a big thing, as observed by Zuckerberg, so expect to see a lot more competition within the large tech giants Youtube, Twitter, Snapchat.
According to AFP, Zuckerberg told analysts that the company will seek to expand their employee pool and budget to invest in videos and other priorities like VR. In his community update, Zuckerberg expects 5 million VR Gear sets to be shipped out by 2027.
A sneak peak of the video content might be short, original videos produced in a series. This might raise the alert of Netflix as well.
Facebook has also recently introduced their camera feature into Messenger and will roll it out soon.
Beyond their expansion, Facebook is giving away the share of its success through the establishment of Internet.org. Internet.org is a Facebook-led initiative to bring internet access and the benefits of connectivity and information to those who have no access to them. One way they are doing this is by providing wifi through Express Wifi in collaboration with local entrepreneurs and internet providers locally. They are currently located in India.
