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Tags: Facebook | mobile | ads | social media

Facebook Mobile Video Ads Fuel Sales Gain That Tops Projections

Facebook Mobile Video Ads Fuel Sales Gain That Tops Projections
(Dreamstime)

Wednesday, 26 July 2017 04:43 PM

Facebook Inc. churned out faster-than-expected quarterly sales growth from its main social network, fueled by continued strength in mobile video advertising.

Instagram, the company’s popular photo-sharing app, also helped second-quarter sales climb 45 percent to $9.3 billion, Facebook said Wednesday in a statement. Analysts projected $9.2 billion.

Facebook’s social network, now with 2.01 billion monthly active users, is steadily driving revenue at a faster pace than at other technology giants. That consistency, which executives have warned may not last, funds the company’s efforts in chat applications and virtual reality, which may take years to contribute meaningfully to revenue. To keep up growth, Facebook has been heavily investing in video.

“Facebook and Google are taking virtually all the growth in digital advertising -- they’re the easiest place to spend your money,” said Brian Wieser, an analyst at Pivotal Research Group.

Facebook shares were little changed in extended trading after closing at $165.61 in New York, just off the company’s record high of $166 on Monday.

Net income rose to $3.9 billion, or $1.32 a share, from $2.3 billion, or 78 cents, a year earlier.

Facebook’s video advertising business has helped drive sales for the last few quarters; now the company is getting into content, too. Facebook has funded TV-like shows and short video series for a new product set to come out in mid-August, people familiar with the matter have said. The effort will help Facebook gain a share of the $70 billion television advertising market.

In the main Facebook news feed, the company said it would stop increasing the frequency of ads shown to avoid turning off its users. For more ad inventory, the company is relying on Instagram, the photo-sharing application. Now with more than 700 million users, Instagram has a mature advertising business, built off of Facebook’s. Instagram has been competing with newly public Snap Inc., the maker of Snapchat, for young audiences.

Other efforts haven’t reached that level. The company’s Messenger application is trying to make money from users’ relationships with businesses. WhatsApp, another chat app owned by Facebook, is on a similar path. Oculus, the company’s virtual reality division, has been working to make the technology popular among consumer audiences, but hasn’t yet seen widespread adoption.

The revenue beat comes as Chief Executive Officer Mark Zuckerberg is talking about the company’s broader role in society, especially as isolationist and nationalist movements spring up around the world. Facebook has been criticized for the spread of extremism and false news on its social network. Zuckerberg has traveled around the U.S., talking to people from different backgrounds and coming up with a new company mission statement: to bring the world closer together.

In order to get there, Facebook is going to put more emphasis on Facebook groups, with the goal of adding 1 billion people to “meaningful” groups, such as those that help people deal with parenting or addiction, from the current 100 million, Zuckerberg has said. The company has also added 3,000 workers to catch violent and abusive comments and images on the network before they cause harm.

© Copyright 2021 Bloomberg News. All rights reserved.


StreetTalk
Facebook Inc. churned out faster-than-expected quarterly sales growth from its main social network, fueled by continued strength in mobile video advertising.Instagram, the company's popular photo-sharing app, also helped second-quarter sales climb 45 percent to $9.3...
Facebook, mobile, ads, social media
510
2017-43-26
Wednesday, 26 July 2017 04:43 PM
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