Facebook used by half of world’s online population

30/07/2015

Half of the world's estimated online population now check in to the social networking giant Facebook at least once a month.

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Facebook said the number of people who use it at least monthly grew 13% to 1.49 billion in the three months to the end of June.

The number is equal to half of the estimated three billion people who use the internet worldwide.
Of those users, it said well over half, 65%, were now accessing Facebook daily.

The rise in monthly active users helped drive second quarter revenue up 39% year-on-year to $4.04bn (£2.6bn).

Mobile advertising revenue was the biggest factor, accounting for more than three quarters of the total.

In the US, the company said people were now spending more than one out of every five minutes on their smartphones on Facebook.

Despite what Facebook boss Mark Zuckerberg said was a "strong quarter", its shares fell more than 3% in after hours trading.

Facebook shares, which are currently trading at around $97 a share, have risen 24% so far this year, easily beating the 7.9% rise in the Nasdaq over the same period.

Analysts said the share price drop was linked to the high expectations for the firm, which typically tends to beat forecasts, as well as concern over its high expenses.

Facebook said that costs and expenditures for the quarter had surged by 82% to a hefty $2.8bn.
As a result, net income fell 9.1% to $719m - equal to 25 cents a share - but the firm said if various expenses were excluded earnings would have been 50 cents a share.

Mr Zuckerberg said the costs reflected "ongoing investments and improvements" it had made, such as its new data centre in Texas, which had helped reduced crashes on the network.

The social network giant warned in April that expenses could rise by up to 65% due to various investments in new staff, changes aimed at improving mobile revenue and the cost of improving products such as messaging service WhatsApp and photo-sharing app Instagram.

But it said expenses would now be lower than expected, at up to 60% higher.

Facebook also highlighted the increasing importance of video, saying that usage continued to grow.

And it said it would start selling its Oculus Rift 3D headset in the first three months of next year.
"3D content is the obvious next thing after video. Video will be huge, gaming will be huge. Once you start to get a critical mass we can get a social app which we are more specialised in," said Mr Zuckerberg.

Comment on Facebook’s Q2 results and the online advertising industry follows from Eleni Marouli, senior analyst at IHS Technology. Please feel free to quote from the below text and our infographic. Eleni is available for TV, Radio and Print interviews from London.

Analysis: ‘More room to grow’

Eleni Marouli, Senior Analyst, IHS Technology, said: “Despite the global growth of Facebook and the statistic that 50% of the online world is regularly logging in, we have still not reached ‘Peak Facebook’. Facebook still has room to grow, and their current strategy is to monetise video to attract the big advertising dollars from major corporations like Coca Cola. Facebook wants to grow video content through partnerships with companies such as HBO, National Geographic and the New York Times. They are also setting up products such as Liverail, Atlas and Audience Network for effective monetisation. We estimate that Facebook will account for 25% of video ad revenues in Europe by 2018.

“At the moment, Facebook has been operating under the mantra ‘bring the audience in and the revenue will come’. So far that has worked, but to be successful, they have to monetise globally. Some 74% of revenue comes from North America and Europe, and only 35% of the audience is located there. Data shows that the number of ads on Facebook has declined by 50%, yet revenue from ads has increased. This tells us that ads are becoming more valuable to advertisers. This is the opposite of what’s happening with Google. Google is still growing through increases in volume, as ad prices continue to decline.

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