Facebook’s earnings rise, but so do costs

SAN FRANCISCO – Facebook said that earnings rose 34 percent in the fourth quarter during an earnings call with investors Wednesday afternoon.

The revenue stream was powered by advertising dollars, especially for mobile ads – still relatively new territory for the social network.

Facebook executives talked to investors after trading ended for the day.

Investors were less impressed, however, with the social media company’s expenses. For the final quarter of 2014, expenses rocketed 87 percent to $2.72 billion. The Menlo Park, California, company noted that spending on research and development more than doubled when compared to last quarter.

The unease was felt immediately ­– shares in Facebook fell 2 percent in after-hours trading amid the news.  

Still, the research money appears to be worth it. Facebook’s foray into mobile advertising, a complicated but undeniably vast market, earned most of the company’s advertising revenue, pulling in 69 percent of all advertising dollars. That percentage is up from 66 percent last quarter and 53 percent from the final quarter of 2013.

The company’s profit hit $701 million off a revenue of $3.85 billion.

Facebook’s user-base is growing in numbers and engagement. Mark Zuckerberg, the company’s chief executive, said during the call that time spent on Facebook per person per day is up 10 percent compared to last year.

Facebook’s oceanic population dwarfs any social network that dares compete. Zuckerberg revealed that the site now has 1.39 billion monthly active users, a significant uptick from the 1.35 billion reported last quarter.

The site’s daily active users, which Facebook deems the most valuable, grew to an astonishing 890 million. In comparison, Twitter, often seen as Facebook’s biggest competition, reported in September that it had 284 million monthly active users.

Zuckerberg also defended the increased spending, claiming that the investments are necessary to keep Facebook charging ahead for the next decade.

Copyright © 2015 Anadolu Agency