Facebook has kept its momentum in the fourth quarter, with revenues still growing strong thanks to the mobile advertising, but he reiterated Wednesday the 1st of February that the pace was going to slow down this year while their investments continue to accelerate. Not content to further expand its audience, now with 1.86 billion of users claimed at the end of December (including 66% who log in every day), the social network, american has ended 2016 with financial performance above expectations of the analysts.
according To figures published on Wednesday its net profit more than doubled to $ 3.6 billion in the fourth quarter and almost tripled to 10.2 billion on the year as a whole. As for its sales, surged 51% over the past three months, to $ 8.8 billion, and 54% on the year to 27.6 billion.
It is reassuring for investors, worried about the growth slowdown: the network itself acknowledges that it has not much margin to increase the number of ads embedded in the news feed of its users. In the fourth quarter, the advertising revenues of the group increased again by 53% to $ 8.6 billion.
on a conference call with analysts, chief financial officer David Wehner has however reiterated the warning already launched three months ago: “the rate of growth of our advertising revenues will decrease significantly in 2017.” It still plans, in spite of everything, “a year of investment aggressive”, with spending expected to increase from 40% to 50% compared to 2016 to fund the acceleration of new hires, research and development activities, in content or in marketing.
Effort in the video
This has cooled the enthusiasm of the New York stock Exchange, where the share Facebook was earning a meager 0,68% 134,14 dollars around 00H20 GMT. However, this could be enough to beat Thursday its all-time record in closing, dating back to October (123,28 dollars).
Facebook has attempted to respond to concerns on lower growth in its advertising revenues in putting forward his efforts in the video, where her boss-founder Mark Zuckerberg says that he sees “a mega trend of the same order (of importance) that the mobile”, the locomotive of the group in recent years. It still accounted for 84% of advertising revenue in the fourth quarter.
Facebook said it would continue to invest in original videos, called, however, to concentrate initially on the contents of short-term, more likely to be shared by the consumers on its network, or products by companies and celebrities to ensure their promotion. It is also said to be working on a model oriented towards a sharing of advertising revenues, to encourage the creation of content as “premium”, more high quality.
Vexation legal in virtual reality
Mark Zuckerberg has at the same time reiterated to analysts his intention to “continue to make large investments in virtual reality”, even though the group had just been hit in Texas by an unfavorable verdict in this area. After a trial of several weeks, its subsidiary Oculus, which was accused of having designed his helmet Rift, using technology stolen from another company that specializes in video games, ZeniMax, has been found partially guilty on Wednesday.
The jurors have estimated the compensation payable to ZeniMax to $ 500 million in total, according to a court document viewed by AFP. It is less than the $ 4 billion that was claimed in the end of the trial ZeniMax, which said that some of its patents, computer code, and technical know-how on virtual reality had played a central role in the development of the Rift. The complaint had been filed in 2014, shortly after Facebook announced the purchase of Oculus for approximately $ 2 billion.
The jury were not given their due across the line to ZeniMax, but they have retained several charges, including breaches of copyright and breaches of contract, against Oculus and its co-founders.
On the basis of this finding, ZeniMax has said to consider making a claim for a court order prohibiting Oculus and Facebook using the computer codes involved, which could seriously hamper the marketing of the Rift. Facebook has not directly commented on, but Oculus has announced its intention to appeal.
(With AFP)
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