Mobile users drive Facebook’s Ad revenue and bulging profits
Facebook’s profits have risen dramtically as it heads towards the two billion monthly active users mark, with mobile advertising driving the majority of the social media company’s revenue.
The company’s fourth quarter and full year financial results for 2016, saw it rake in $8.6 billion (around £36.4bn) in advertising revenue, a 53 percent increase over 2015’s results. From this advertising, 84 percent of it came from serving mobile ads.
Facebook rakes in the ad revenue
The boost in advertising revenue was driven by Facebook’s user bas growth, with its daily active users seeing an increase of 18 percent to 1.23 billion, with some 1.15 billion accessing the social network on their mobile devices.
Monthly active users increased by 17 percent to 1.86 billion as of the end of December, with monthly mobile users taking up 1.74 billion of that massive user base.
Facebook also makes a decent profit on its advertising revenue, with $3.5 billion (£2.7bn) being added to its coffers.
Facebook CEO Mark Zuckerberg, indicated that the social network will continue to focus on building out the video capabilities of its platform, as well as push into virtual reality with its Oculus Rift division and other ways to host all manner of content.
“We’re experimenting with Live 360 video, audio-only live for people with slower connections, and live face masks and more camera effects, and we’ll have more updates soon,” said Zuckerberg in an earnings call transcribed by Seeking Alpha.
“We want people to think of Facebook as a place for interesting and relevant video content from professional creators as well as their friends. Last year we started to invest in more original video content to help seed the ecosystem, and we’re planning to do more in 2017.”
Zuckerberg also indicated his short and long-term plans for Facebook and its subsidiaries like Instagram and WhatsApp, as well as explore some of its more far-flung projects such as Intenret.org.
Over the next five years, we’re going to keep building ecosystems around our apps that a lot of people are already using. Growth and engagement on Instagram have been strong. We announced in December that Instagram now has over 600 million monthly actives and recently passed 400 million daily actives,” he said.
“Over the next 10 years, we’re going to continue to invest in these platforms and technologies that is going to give more people a voice and make sharing even more immersive. Through our efforts with Internet.org, we have now connected more than 50 million people to the Internet.
“And, in November, our Connectivity Lab set a world record by transmitting 20 gigabits per second over 13 kilometers using the same amount of power that it takes to light a single light bulb. Ultimately, this technology is going to make it into the solar-powered planes that we’re building to beam Internet to parts of the world that aren’t connected.”
Much like Amazon, Facebook has transitioned from being just a website with a focused service into a technology giant. So it comes as no surprise to see Facebook join Microsoft, IBM, and Google in the ‘Partnership For AI’ alliance.
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