Facebook's Revenue Keeps Climbing
Facebook reported a 55.8 percent rise in quarterly revenue on Wednesday, as a result of the successful transition from desktop to mobiles and strong mobile-advertising sales.
In the April-June quarter, Facebook had $6.24 billion in advertising revenue, a 63 percent increase from a year earlier. Mobile advertising accounted for 84 percent of this.
Facebook had 1.71 billion monthly users as of June 30, up 15 percent from a year earlier. More than 90 percent of Facebook's users access the social network through mobile devices.
Total revenue rose to $7.01 billion from $4.50 billion. Excluding items, the company earned $1.09 per share.
"We had another good quarter," said Mark Zuckerberg, Facebook founder and CEO. "We're making progress putting video first across our apps and executing our 10 year technology roadmap."
However, Facebook warned that revenue growth would slow this quarter.
In a call with analysts, Facebook Chief Financial Officer David Wehner said ad growth would likely slow "meaningfully" due to limits on "ad load," or the number of ads that Facebook can put in front of customers without alienating them.
He also said 2017 would be a year of aggressive investment that will see a substantial increase in expenses.
Video push
Facebook's latest strategy is to grow both user-generated and advertiser-created videos as it tries to get a firm foothold in this growing market. The strategy appears to be working. Advertisers are already testing the waters with live video. General Motors, for example, launched its electric Chevy Bolt EV through Facebook Live this year.
Where Twitter failed with the quirky, killed-off video app Vine, Facebook is succeeding with Instagram, not to mention its main service. Users are posting and watching live and recorded videos, thanks to more powerful smartphones and a relentless prodding by Facebook to do so.
Video ads make up a small but growing slice of the overall digital ad market. Research firm eMarketer expects U.S. mobile video ad spending to hit $7.1 billion in 2018, up from $4.5 billion this year. That's about 10 percent of the overall money spent on mobile advertisements.
Live and prerecorded videos are just one example of the new ways Facebooks is finding to show you ads. In the near future, expect ads on the messaging service WhatsApp, or on Oculus Rift, its virtual reality headset. And if you are using Facebook Messenger, you are likely seeing the precursor of ads in the service, in the form of businesses messaging you with automated "chatbots."