Thanks to mobile advertising, Facebook cashed in $701 billion in 2016’s third quarter, beating the $6.9 billion estimate set by analysts.
Facebook and Google are the largest companies that profit from the Internet’s digital advertising, a market with so much momentum that it appears difficult to beat due to the online presence that both companies boast. But Facebook also warned that ad revenue growth could slow significantly in 2017 as a reduction in ad exposure will be implemented. After this announcement, Facebook shares dropped 7 percent to $118.75.
Cashing in on Facebook’s innovation
Last quarter, 84 percent of Facebook’s advertising revenue came from mobile advertising. This rate has been increasing since the figure was first reported in 2012. Virtually anyone can create a Facebook account.
Each account is exposed to advertising and many users open the ads, which generate revenue. This is added to the fact that Facebook promotes user-oriented advertising, where every bit of information introduced and shared by the user is taken into account to display the ad that will most likely spark its interest.
The number of people that use Facebook at least once per month also increased by 16 percent, which equates to 1.79 billion. Since 2015, 243 million new monthly users created accounts on Facebook, which has been compared to the total users registered on Twitter that use the platform at least once per month.
Since Facebook’s initial public offer, its shares have jumped from $42.05 to $118.75. The company managed to acquire Instagram for $1 billion and take hold of its 30 million users. Facebook also owns WhatsApp, the largest instant media messaging app, which was bought for $19 billion along with its 450 million users.
Facebook has put itself on the edge of communications and technology, as it also went ahead and bought Oculus for $2 billion, opening the gates to augmented reality to let users connect with each other in the most novel way possible.
When it first started, investors were not sure that Facebook would be profitable, and now it is impossible to say otherwise. Facebook CEO, Mark Zuckerberg, has reported being betting on artificial intelligence, augmented reality, and freely accessible Internet.
One of the main differences between Google and Facebook is that Facebook works toward developing its own strengths without going too far from their original vision, which is connectivity among people. On the other hand, Google works on different divisions and fields, trying to connect homes, make smart contact lenses, and much more than just using the Internet.
A company built for the future
Zuckerberg is also a young entrepreneur, as he created Facebook without any experience either running a company or being in one. According to Marc Andreessen, one of his closest colleagues, Facebook’s CEO learned everything he knows about business in only 10 years, becoming one of the most successful leaders in the world.
Mark Zuckerberg has been credited with being persistent, devoted and able to deploy resources to where they will achieve their full potential. His earliest colleagues remember that Zuckerberg always tries to break large achievements into small steps, making them look feasible and doable.
One of the goals for the future for Mark Zuckerberg is to allow people “to send full rich thoughts to each other directly using technology.” This is due to the trend in communications that people are being increasingly able to share content, it being music, images, and text. In a few years, Facebook will be sure to implement virtual reality communications, allowing to have a complete sensory experience with people, no matter where they are.
He also recognizes that communication is always aimed at becoming simpler and faster. People used to send emails on large computers, and now they are able to hold a smartphone several times more powerful than the first computers, all while being able to send and receive information to and from the Internet.
“Our lives improve as our communication tools get better in many ways. We can build richer relationships with the people we love and care about. We know about what’s going on in the world and can make better decisions in our jobs and lives,” Zuckerberg said on a forum, where he answered questions asked by many Facebook users and personalities, including Stephen Hawking and Arnold Schwarzenegger, who asked about Zuckerberg’s workout regime.
Hawking, on the other hand, wanted to know which scientific question was of most interest for Zuckerberg, to which he referred to those that are directed toward helping people live better lives and understand more about themselves. He also stated that he’d like to know if there is a mathematical theory for determining what other people do care about.
Facebook closed its third quarter by reporting a possible slow in growth, which drove some investors away. What Facebook has accomplished so far is very hard to compare to what will come for the future of networking and communication, and it seems that Facebook will be a key player in that future.