July 31, 2014
Facebook, the popular social networking platform, has just announced an over $2.91Billion in revenue for the second quarter of 2014. Facebook has shown an impressive performance and its sky rocketing growth is showing no signs of slowing down. Facebook’s second quarter has shown successful growth, after a momentary dip in its first quarter, and its revenue is at an astronomical gain of 61% over the same period last year. Facebook has also beaten Wall Street’s estimates of $2.81 Billion in revenue and a huge increase in the amount of user data has been observed which Facebook can store and analyze. Facebook’s user base has continued to grow, with monthly active users having risen to 1.32 Billion out of which 1.07 Billion are mobile users. The number of daily active users currently is 829 million while 654 million users are daily using Facebook on mobile.
The company’s emphasis on mobile presence has been gaining momentum in the recent years and mobile advertizing sales have accounted for 62% of its revenue. Facebook has been cashing on the fact that it has good advertizing solutions and a huge customer base. With the addition of video advertizing and improvement in quality of promotions targeted for phones and tablets, Facebook has managed to increase profits due to the increasing number of mobile users. The average price per ad has increased by 123% which goes to show the massive user base of Facebook. Due to huge traffic to the website, the advertizers get higher returns on their investment which enables them to pay more money for future advertizements and thus increase Facebook’s revenue.
Facebook is growing its share in the global mobile advertizing market, which is expected to be up by almost 85% this year. To get a greater slicing of the advertizing budgets, the company also plans to take on TV by buying a video technology company. Facebook Audience Network was also launched to profit from advertizements on other companies’ apps by using the Facebook user data to improve their targeting. Facebook has allowed advertizers to use their user data and the company is in the process of acquiring LiveRail, a startup, to serve video ads on third parties publisher’s sites. Facebook’s mobile and video networks allow for a greater generation of revenue and Facebook can probably extend its third party ad network, much like the Google and Yahoo.