Facebook swells to 1.65B users and beats Q1 estimates with $5.38B revenue
Facebook surpassed the estimates in its Q1-2016 earnings report with $5.38 billion in revenue and $0.77 earnings/share. The company reached a user base of 1.65 billion monthly users. Facebook's share price climbed more than 8% after the announcement. 82% of the total ad revenue came from mobile ad revenue in the first quarter ending March 31, compared with approximate 73% in March 2015.
Facebook: The social network giant
Facebook is the world's most popular online social networking platform started in February 2004. It facilitates its users to stay connected with each other through a series of web and mobile apps. Facebook provides its users web and mobile apps to help them "connect, share, discover, and communicate with each other." The access to these apps is provided free of charge to all users.
How does Facebook make money?
Facebook makes most of its revenue by selling advertisement placements on its website and mobile apps. A major chunk of its profit comes from advertising. Facebook had 2 million active advertisers by February 2015. Facebook also generates a little share of its revenue from its platform developers by obtaining a fee from them when the users buy from them using its payment base.
What Facebook has to offer: Services and acquisitions
Facebook web and mobile offerings enable its users to share their views, videos, photos with friends and followers. Another intrinsic part of Facebook is its mobile-to-mobile messaging application- Facebook Messenger. Other than that, Facebook's offerings include mobile-photo sharing Instagram that it acquired in April 2012. Facebook also acquired the popular cross-platform mobile messaging application Whatsapp in October 2014.
Times Facebook surpassed profit expectations: 9 times in 10 quarters
Facebook's current profits mark the "ninth time Facebook has outperformed analyst expectations in the last 10 quarters."
Proposal for new class C shares
With the current success, Facebook is planning to propose changes to its stock structure. If accepted, the stock proposal will "issue two shares of Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock." This will allow Zuckerberg to retain control of Facebook's voting power despite donating 99% of his shares to charity.
