Posted on July 28, 2016 by staff

Facebook revenue growth smashes Wall Street expectations


Facebook smashed expectations in announcing its quarterly profits and revenue.

The media giant saw a 59.2 per cent rise in revenue to $6.44billion (£4.88bn) in the second quarter, compared with Wall Street’s estimates of $6.02bn (£4.56bn).

The firm has attracted new advertisers and encouraged existing advertisers to spend more thanks to its massive presence in people’s lives and growth of its video and messaging services.

Following the announcement, Facebook shares rose 6.7% in after-hours trading.

Mobile advertising revenue made up 84 per cent of total advertising revenue, compared with 76 per cent a year ago, while mobile ad revenue increased 81 per cent in the same period.

“We’re improving the experience for our community by helping them build more relevant and engaging ads,” founder and CEO Mark Zuckerberg told investors.

Facebook has encouraged advertisers to use Facebook Live to connect with their audience more directly.

The tech behemoth said 1.71bn people are now using Facebook on a monthly basis compared with 1.49bn a year earlier.

Messaging is key to its growth and the hosting of future engagement between people and businesses as artificial intelligence and bots become more commonplace.

Facebook now has more than a billion users on Messenger and bought WhatsApp, which has a comparable number of users, for $19bn in 2014.

The two platforms host 60bn messages a day – three times the amount of global text message traffic.

“The scale we’ve achieved with messaging services makes clear that this is more than just a way to chat with friends,” said Zuckerberg, “which is why we are making it easier to connect with groups and businesses as well.”

Facebook is also planning to connect more of the world to broadband internet using drones – Aquila – while Google has similar aspirations with its Project Loon balloon project.

“We saw the first successful flight of Aquila to beam the internet to places that have never been connected,” says Zuckerberg.

“Eventually we plan to work with telecom operators around the world to connect people who cannot get traditional connectivity today.”

That is seen as crucial to increasing Facebook’s user base, something social media competitor Twitter, which yesterday reported a decrease in revenue, is struggling with.