Facebook Now With 1.44 Billion Monthly Users But Revenue Growth Slows Down


In its first quarter 2015 results, Facebook reported that it now has 1.44 billion users, with most of the traffic—and almost three-quarters of the company's advertising revenue—coming from mobile devices.

However, the company's growth of revenue and profit for the quarter is slower than in recent quarters.

The company's transition into mobile mirrors Facebook's transition from text to video, with users watching an average of 4 billion videos daily on the social network. This is equivalent to less than four videos per user, although this might not be a perfect figure because three seconds of watching a video already counts as "viewing" it.

"More than any other company right now, they are the single biggest beneficiary of this shift to video and mobile," said RBC Capital Markets analyst Mark Mahaney, who also adds that the growth may prove to be more sustainable than expected.

The slowed revenue and profit growth, however, could simply be due to Facebook's limitation on how many advertisements it sells on the social network and on Instagram. There are currently no advertisements being sold yet for WhatsApp and Messenger, despite demand from advertisers.

During a conference call, Facebook co-founder and CEO Mark Zuckerberg clarified that it is not looking to flood its users with more advertisements, but only to improve the advertisements being shown.

"The primary goal is to increase the quality. That's our strategy for growing the business," said Zuckerberg.

The strategy seems not to have affected Facebook's earnings. The average advertisement price increased by 285 percent, while the number of advertisement views decreased by 62 percent, but the company was still able to rake in $3.32 billion of advertising revenue, which is a 46 percent increase.

Facebook's revenue for the first quarter was reported at $3.54 billion, an increase from the revenue of $2.5 billion posted in the first quarter of 2014 but falling slightly short of Wall Street's expected $3.56 billion. However, Facebook said that its revenue would have hit the mark as it lost $188 million due to currency fluctuations.

Facebook's net income was reported at $512 million, equivalent to 18 cents per share, compared to $642 million, or 25 cents per share, in the same period last year. Not including employee stock compensation and certain expenses, the profit of Facebook was $1.19 billion, equivalent to 42 cents per share, an increase of 28 percent compared to the first quarter of 2014 and reaching the expected 40 cents per share of analysts.

"We're really pleased with the growth, which is across all of our verticals," said Facebook COO Sheryl Sandberg.

Photo: Kārlis Dambrāns | Flickr

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