Tuesday, 24 April 2012

Facebook today has reached 901 million users; net income dips

Facebook by now has more than 901 million monthly active users, up from 845 million in the last quarter, although the social network stated a dip in advertising revenues and net income, according to documents filed Monday.

Facebook’s amended S1 registration alongside the Securities and Exchange Commission consists several significant new financial and performance numbers, especially since the company is racing towards an initial public stock offering anticipated for mid-May. 

The company said its total membership has surged 33 percent, from 680 million monthly average users, from March 2011 to March 2012. That includes 188 million in the United States and Canada, 241 million in Europe and 230 million in Asia. 

And in that same period, the number of daily average users increased 41 percent, from 372 million to 526 million. 

The number of people who use Facebook on mobile devices whack 488 million monthly active users by March 31, and crossed the 500 million monthly average user mark on April 20. Facebook continue to expects mobile users will could possibly surpass PC users, although it warns mobile remains an Achilles heel because it does not “generate any meaningful revenue” from mobile. 

Facebook’s purchase this month of Instagram in a deal worth $1 billion is projected to boost mobile use even further. For the first time disclosed that the deal was for 23 million shares of Facebook common stock and $300 million in cash, although Facebook owes Instagram a $200 termination fee if the deal falls through. 
Facebook further made report Monday by agreeing to pay $550 million to buy 650 patents from Microsoft, which acquired those patents in an April 5 deal with AOL. 

On the financial side, Facebook posted revenue of $1.06 billion for the first quarter of 2012, up about 45 percent from $731 million for the same quarter a year ago. But quarterly net income was $205 million, down from $233 million for the same period last year. 

Facebook also said the income dip was caused by the increase in expenses as Facebook hired more employees and expanded its technical infrastructure, which took a $97 million charge for the quarter because of the restricted stock units revealed to some employees after the start of 2011. 

And advertising revenues, which make up the bulk of the company’s income, were $872 million, an enhancement compared to the $637 million generated in the first quarter of 2011, but down from $943 million in the fourth quarter. 

Advertising revenues are historically stronger in the fourth quarter than they are in the first, Facebook said. 
That’s in line with the overall 3.2 percent in the overall u.S. advertising market from the fourth quarter of 2011 to the first quarter of 2012, according to research firm eMarketer Inc. 

Facebook’s latest financial results were below eMarketer’s projections, but principal analyst Debra Aho Williamson said the first quarter was a “transition quarter” for the company, which rolled out new premium advertising services at the end of February. Those services and an increasing focus on mobile will impact revenues later in the year, she said. 

One new metric Facebook disclosed was average revenue per user, which was $1.21 worldwide, a 6 percent increase year-over-year. The average was higher in countries where Facebook has more members and a more developed ad sales system. 

In the first quarter, Facebook said half its revenue was generated by users in the United States and Canada, compared to 54 percent a year ago, “as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia and India.”


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