Facebook posts $3 bn profit in Q1

Facebook posts $3 bn profit in Q1

Facebook posts $3 bn profit in Q1

Mobile ad revenues in the quarter were $6.7 billion (up 58% year over year), contributing 85% to total ad revenues.

More broadly, CEO Mark Zuckerberg said Facebook is transitioning its emphasis from the last decade's focus of connecting friends and families to building communities.

"The company's ongoing expansion is substantial considering how big it already is", Wieser wrote in a research note.

Net income attributable to Facebook shareholders rose to $3.06bn, or $1.04 per share, in the first quarter from $1.73bn, or 60 cents per share, a year earlier.

David Wehner, Facebook's CFO, said in November the company expected to see its ad sales growth rate "come down meaningfully" in 2017.

The company reported US$8.03 billion in revenue for the quarter, an increase of 49% year-on-year and higher than analyst estimates of US$7.83 billion.

Brian White of Drexel Hamilton, who has a "buy" rating on shares of Snapchat, expects Snapchat to hit 171 daily active users in the first quarter of the year, keeping it behind Facebook in terms of that metric.

The number of people using Facebook each month increased to 1.94 billion, of which almost 1.3 billion use it daily, the company said. The Menlo Park-based social media giant thus revealed that a minor feature of its instant messaging (IM) app that was likely inspired by Snapchat's Stories functionality now has more users than Snapchat has in total.

Facebook's non-advertising products, such as its Oculus virtual reality headset and the Workplace office software, now generate little revenue. Facebook shares fell as much as 4.2 per cent as that message overshadowed first-quarter sales. Snap does have a chance to show how it can maintain market share and a bright spot would be continued exclusivity of said market share. We expect that ad loads will play a less significant factor in driving revenue growth after mid-2017. "These are important steps as we continue to build the advertiser trust", she says.

Infrastructure costs are also expected balloon this year to support global expansion. About 1.25 billion people will access their Facebook account via a mobile phone this year, up 10.2 percent over last year. The recent launch of the company's new camera platform and the success of Instagram Stories and WhatsApp Status has demonstrated Facebook can still attract vast swathes of users to new ideas.

Expanding its war on "false news", Facebook also recently released a broad plan to stop bad actors from spreading misinformation on its platform. Advertising revenue is expected to take a further beating the third quarter as Facebook continues to fight ad blockers on desktops. Facebook has also started working with Journalism Project to help educate people on digital news literacy as part of its solution to the growing problem of fake news.

To monitor content and remove violent videos, Facebook will be hiring 3,000 additional employees over the next year.

Some companies diversify through acquisitions, but most of Facebook's purchases such as Instagram and WhatsApp have been in adjacent markets.

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