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Facebook: More Populated Than China

Ad Revenue Soars To Scary-High Levels

Facebook is taking over the world.

Although I've used this as a cheap joke in the past, the level of hyperbole associated with the phrase is decreasing by the day. For example, the site just made some new figures public for its shareholders, and the numbers are pretty terrifying. 1.35 billion people sign onto Facebook at least once a month; 864 million log in daily. These have combined to boost Facebook's ad revenue by 64 per cent in the third quarter of 2014 alone. Overall, this accounts to a total profit of $806m - a 90 per cent increase when compared to this time last year.


If these figures don't sound like much, let's put them in perspective: if Facebook was a country, it would be about as big as China. And China, in case your geography isn't as impressive as mine, ain't no one-horse town.
What makes this all so mind-blowing is that this profit comes despite a series of huge, well-publicised takeovers. Takeovers like the $2bn purchase of virtual reality company Oculus VR, who designed the Oculus Rift, and the 22 billion they splashed out on WhatsApp, the instant messaging platform that Mark Zuckerberg claimed had enjoyed a faster growth rate than Facebook mobile itself. If these purchases prove profitable, and Facebook’s recent strides in advertising continue to be as fruitful as they have been so far, who knows what kind of crazy increase in revenue they'll be set to achieve by the end of 2015.

As we've reported, Facebook have been aggressively marketing pretty much every one of their divisions in the last few months, and growth has been exponential. Much of this is down to the success of Atlas, their new play-thing which allows them to use what they discover about us on Facebook to try and sell us stuff elsewhere on the internet. Whether that's wrong or right is up for debate, but it's making them a hell of a lot of money. In the end, isn't that all their investors care about?

Elsewhere, their completion rate for apps, purchases and updates has been nothing short of extraordinary, and, with the aforementioned investments into both hardware and software companies, this is a trend that looks set to continue; who even knows what they plan to do with Oculus and WhatsApp in the future?

Despite much user unrest with Facebook's recent developments, its customers seem to be reacting well to its changes as a whole. Confirmed updates such as an app to allow anonymous chatting and a heavily rumoured update to Messenger that will enable us to send money over the service seem to have been well received, and Facebook seems set to continue pumping out the updates we do want to make the stuff we don’t seem like a fair compromise.

Not everyone is on their side, though.

Amid the initial discussions of Facebook's purchase of WhatsApp, many senior members of the European telecoms industry were strongly against allowing the deal to go through for fear of Facebook gaining a monopoly. But the opposition eventually subsided, and Facebook stuck to its recent give-and-take philosophy by taking itself a monopoly, but giving us the promise that it won’t interfere in any way with the running of WhatsApp - including pledging not to force ads onto the service (which, by the way, has recently happened with Instagram).

It’s not all good for Facebook, though

Recent reports have suggested that the social network’s stranglehold over this generation’s new breed of teenagers is slipping, with many of them drifting towards other social networks (most likely in a bid to evade their parents, who have been signing up to Facebook en masse over the years). This could be why the same financial report which waxed lyrical over Facebook's 90% year-on-year profit increase also revealed that their share prices had dropped by around 10 per cent.

So, should there be a small sliver of worry among the whoops and celebrations that must currently be going on over at Facebook headquarters? I would argue not, as part of the reason the share prices have dropped so dramatically is that Facebook themselves have warned investors their purchases of WhatsApp and Oculus Rift are set to dent total revenue streams for months to come. In fact, they've gone so far as to specifically reveal that outgoing costs are going to increase by 75%

This transparency has scared a few investors away, sure, but it will only serve to convince investors in the long-term that their word can be trusted, and they can be invested in more heavily. In other words, it’s all just part of the plan.

Oh, and the social network referenced above that most teenagers are jumping ship to? It’s Instagram, and it’s already owned by Facebook.

Emile is a postgrad from the University of Saint Mark and Saint John. He’s hoping to break into journalism or publishing, and won’t stop blogging until he’s managed it! Follow him @EmileAtSMF.

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Facebook: More Populated Than China Reviewed by Emile Cole on Thursday, October 30, 2014 Rating: 5
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