The Californian online social networking firm, Facebook Inc (NASDAQ FB), reported its second quarter earnings on July 23, exceeding analysts’ expectations for the eighth straight quarter with $2.91 billion in revenue and earnings per share at $0.42. The company is making inorganic growth the mode to grow larger in the advertising services domain.
Revenue for the quarter climbed 61% to $2.91 billion from the last year’s corresponding period beating Street estimates of $2.81 billion. The mobile ad revenue that accounted for 62% of the advertising sales grew by a whopping 151% year over year. After the second quarter, the number of monthly mobile users of Facebook stands at 1.07 billion. Overall, the entire advertising sales grew by 67% to $2.7 billion from the year-ago period.
The steep rise in wireless ad sales in the second quarter is in tune with the estimation given by research firm, eMarketer that predicts that mobile ads would account for 68% of Facebook’s U.S. advertising revenue in 2014, an increase from 46.7% in the earlier year.
Facebook Inc: A Look at Q2
Facebook continues to grow its community in size and engagement. There are around 1.32 billion people connecting to Facebook every month, and 63% of them visiting it daily. The number of people using Facebook services on the mobile on a daily basis currently stands at 650 million, and is surely testimony to the fact that mobile advertising has contributed vastly to its revenue in the quarter.
Total payments and other fees revenue was also up 9% to $234 million from that reported in the comparable period last year. Organic growth in the payments business was eminent with payment volumes from games going up 1% this quarter when compared year over year. However, as games payments revenue comes entirely from desktop usage and there is a decline being seen in Facebook users on desktop, this change in consumer trend might drag the games payments revenue in the upcoming quarters.
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Facebook Inc (NASDAQ FB) Business News
Facebook accounted for 5.8% of worldwide digital ad revenue in 2013, up from 4.1% in 2012 as per research firm, Emarketer. Worldwide digital spending has risen 14.8% to $120 billion in 2013 and is expected to reach $140 billion by the end of the year.
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