Thursday, January 31, 2013

Revenue Rose 40% as Facebook Strengthen on Mobile Advertisement Sales.

Squeezing is the right word used by Facebook to post an 40% growth in Fourth- quarter revenue to climb up to reach $1.59 billion and it is considered to be strongest quarterly advertising Sale so far.
Profit fell by 79%, weighed down by spending on new initiatives and charges related to employee stock.
Mobile users brought in more money due to the use of smart phones. Advertising on the mobile newsfeed accounted for 23 per cent of its advertising revenue, which is double the forecast and last quarter result.
"The quarter was a little like a cold shower after you've been out all night - it's something that makes you sober up very quickly,"

Revenue Posting Up

Cost spent on Research and development has finally set an negative impact on the wall street after showing a growth on quarter to quarter results in revenue.

Facebook Shares
Closed at $31.24 on Wednesday fell more than 3 Percent, the stock plummeted as Wall Street soured on its ability to increase profit as fast as investors wanted.

Facebook Users
Company reported 1.06 billion active users for the month.

Figure to Watch out
4th Quarter
                               Actual  Predicted  Impact
Revenue                  $1.59   $1.52        +ve
Revenue %              40%    34%          +ve
Mobile Ad Rev %    23%    14%          +ve
Cent a Share            17       15             +ve

Negative impact (-ve)
Net Income for the quarter was $64 million or 3 cents a share, compared to $302 million or 14 cents a share a year earlier
which paved way for speculation and thereby closed with a drop in share price as the company is preparing itself for future, than looking into huge margin for the following quarters.

Zuckerberg said that recently introduced products such as Gifts, which allows Facebook users to purchase retail goods for their friends, as well as its new social search tool could become important businesses in the future. But in the near term he said that Facebook's advertising efforts will be the core of its business.

Facebook Plans
Expenses on employees expected to jump 50% in 2013.
Capital investment may climb to $1.8 billion, up 14% from last year $1.58
Intend to Spend more on Opportunities in hiring skilled people and build products for future.
Facebook has taken forward after all the hard work they have done to build in "Graph Search" an unique product to stay connected.

FBNME suggest Facebook to come up with something more than graph search, either by creating a tool which can support the users in staying connected with people with mutual interest in one subject matter.

Even though the company showed a remarkable growth in quart on quart sale,  it still fetch a less interest among the investors due to its excess spending on research and development.
Experts still feel the company are adopting with the market competition and will perform better in long run as they spend more on capital expenditure "the market would be less happy if they were not finding enough opportunities."
Investor should always look into FB. inc. which is expected to come up with more innovative products and services.

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