Facebook clears US$1 billion for quarter
Firm’s biggest moonshot, virtual reality, will get a big test in coming months
You may not realise it, but Facebook is making more off you now than ever.
The social network released its earnings for its fourth quarter and all of 2015 on Wednesday, revealing in a presentation that it makes an average of US$3.73 for each user around the world. In the United States and Canada, that figure is US$13.54, up from US$10.49 from the third quarter. That is largely thanks to an increase in mobile and video views - an impressive statistic, considering that both are relatively new ventures for Facebook.
The company also reported steady, if not spectacular, user growth – it now has 1.59 billion monthly active users, up 14 per cent from the same time in 2014.
Still, in its fourth quarter, Facebook made more than US$1 billion in profit, a first for the social network. And it made US$5.8 billion in revenue, a 52 per cent increase compared with the same period in 2014, easily beating analysts’ estimates.
Facebook’s increasing revenue and steady profits, along with the fact that it remains the world’s largest social-media network, are more than enough to make up for any worries about growth – a problem that has plagued other tech firms such as Twitter and Apple in recent weeks. After all, Facebook clearly knows how to make more money off the customers it already has as it approaches its 12th birthday.
Cheered by the strong quarter, Facebook’s investors sent the stock up to more than US$106 on the news in after-hours trading. The stock closed at US$94.45.
The company also reported that it is making more money than ever from mobile advertising, which now accounts for 80 per cent of its revenue. At the end of 2014, mobile advertising made up just 69 per cent of Facebook’s ad revenue.
This Oculus launch is shaping up to a big moment for the gaming community
As the engines of commerce keep turning at Facebook, the firm’s executives and analysts are focusing more on how the company’s other bets are working.
Chief executive Mark Zuckerberg spent a significant portion of his remarks on a call with investors outlining some of those experiences.
He noted that the company continues to be strong in the messaging space, with Whatsapp and Messenger. It also has Instagram, which continues to add users and has become a crucial second advertising platform for the company.
Zuckerberg also highlighted ways that Facebook is working to improve internet connectivity around the world, briefly discussing its internet-beaming drones and work with transferring data by laser. He also mentioned the company’s controversial “Free Basics” programme, which allows users in developing countries to access the internet for free – but only the parts that are part of a Facebook internet bundle. Zuckerberg did not directly address those criticisms, but vowed to keep the programme going.
“Even as the world has tended to greater openness over time, in many communities we see greater fear over what a connected world and more progress means for them,” Zuckerberg said. “We’re going to keep working to give as much voice as we can [to unconnected regions].”
The firm’s biggest moonshot, virtual reality, is getting a big test in the coming months. Oculus, which Facebook bought for US$2 billion, is releasing its first commercial headset. The first units are set to ship in March.
“This Oculus launch is shaping up to a big moment for the gaming community,” Zuckerberg said on a call with analysts. “Over the long term, VR has potential to change the way we live, work and communicate, as well. The launch is an important step towards the future and we’re really looking forward to seeing how people use it.”
