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Facebook’s growth slows slightly, but mobile shift intensifies

original article fromhttp://www.smh.com.au/business/world-business/facebooks-growth-slows-slightly-but-mobile-shift-intensifies-20150422-1mr8ps.html

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The company said 1.44 billion people logged into Facebook apps or its website at least once a month, and nearly two-thirds of them visited daily. Photo: Reuters

 

Facebook is more mobile than ever.

Revenue and profit growth at the company slowed slightly in the first quarter, Facebook said Wednesday. But almost three-quarters of the company’s revenue and most of its visitors came from cellphones and other mobile devices.

Users were also deeply engaged in the platform. The company said 1.44 billion people logged into Facebook apps or its website at least once a month, and nearly two-thirds of them visited daily.

“This was a strong start to the year,” Mark Zuckerberg, Facebook’s chief executive, said in a statement announcing the results. “We continue to focus on serving our community and connecting the world.”

Facebook, which makes most of its money by selling advertising that is shown to its users, reported revenue of $US3.54 billion in the quarter, up 42 per cent from the $US2.5 billion it brought in during the same period a year ago. That fell short of the $US3.56 billion that Wall Street analysts had been expecting, according to a survey conducted by S&P Capital IQ, although Facebook noted that revenue would have been $US188 million higher if currency fluctuations were excluded.

The company’s net income was $US512 million, or 18 cents a share, compared to $US642 million, or 25 cents a share, a year ago. Excluding costs for employee stock compensation and certain other expenses, Facebook’s profit was $US1.19 billion, or 42 cents a share, up 28 per cent from last year. That topped the 40 cents a share that analysts had expected.

Last year, Zuckerberg signaled that Facebook would spend more in 2015 and he appears to have been true to his word: Expenses rose 83 per cent in the quarter.

Globally, Facebook is one of the most powerful players in digital advertising. The company had 7.9 per cent of the $US145 billion global digital advertising market in 2014, according to the research firm eMarketer, second only to Google, which had 31.4 per cent. The company’s advertising revenue rose 46 per cent in the quarter to $US3.32 billion.

“We’re really pleased with the growth, which is across all of our verticals,” Sheryl Sandberg, Facebook’s chief operating officer, said in an interview. She said the company’s nascent video advertising business was strong, with the movie and entertainment industry, in particular, embracing it. “We’ve always believed our ads should fit the format of what people see on Facebook,” she said.

More than ever, Facebook was a mobile powerhouse, with 73 per cent of ad revenue coming from mobile devices, compared with 59 per cent a year ago.

Although most analysts say that Facebook still has plenty of room to increase advertising on its core service, the company has also been branching out into new areas. It has begun showing ads on Instagram, its separate photo-sharing service that had 300 million users as of December, and has a growing video advertising business.

Facebook has also been building more sophisticated tools that let advertisers combine the data the company has collected about its users with other sources to show targeted text, image and video ads to people using other websites and mobile applications.

Facebook shares fell 2 per cent in after-hours trading Wednesday following the earnings announcement.