What Analysts Have To Say About Facebook’s Claim Having High Profits
According to Mark Zuckerberg, Facebook is enjoying a healthy business profit with a huge $1.46 billion on the first quarter reflecting a 38% increase from last year’s first quarter of $1.6 billion.
According to his report, Facebook received an average of 665 million Daily Active Users (DAU) in May 2013 which reflects a yearly increase of 26%.
Furthermore, the report indicated 1.35 billion monthly active users by 31st March reflecting 23% of the usual annual increase. All these statistics are out there despite the recent claim that Facebook was loosing its sparkle.
The report indicates that advertising has also increased because the figures indicated that $1.25 billion was spent on advertising; which represents 85% of the total revenue. It reflects a 43% increase from the a similar quarter from last year.
The magic behind this increase is the number of subscribers who were using mobiles. 751 subscribers logged using the mobile phones by 31st March indicating a yearly increase of 54%. Also, mobile advertising has contributed to 30% of the advertising revenue.
Though this sounds good, analysts are bothered with the large expenditures. In 2013, the expenditure for the first quarter was 60% in comparison to that of 2013.
Forbes has claims that Facebook’s large investment on ever growing staff and new infrastructure push it to too hard to realize dismal profits. Even if this is true, you must comprehend that profit shall always be profit regardless the figures achieved.
In order to keep Facebook user on the pages for longer time, Facebook took a giant step towards investing in more mobile oriented products like Facebook Home and redesigning of newsfeeds.
It may be that the decline is due to the fact that there are fewer mobile ads hence; the rise in the numbers of subscribers who use mobile only is squandering the potential ad revenue.
Though Facebook needs mobile to succeed, it has proved expensive because it is eating deeper into revenue. Because there is no clear signs concerning having ads on instagram they are careful about investing in mobile and advertising.
Looking into the daily active users across the USA, it is clear that the user rate has flatlined. Though real growth is still achieved outside North America, we can not figure out what percentage of the outside world is still available to come onboard.
It seems that Facebook has maxed out hence leaving us with one perception; the naysayers might be right. Do you think Facebook’s report about enjoying more numbers is true or it is fraud in pretty slides?