Facebook posts 32% Q3 revenue growth to $1.26bn - and still makes a loss
A torrid spell for Facebook may be coming to a close after the social media giant revealed a healthy 32% rise in Q3 revenue growth to hit $1.26bn, driven largely by mobile advertising. Nevertheless the firm still made a $59m loss.
Commenting on the figures social media expert and business adviser, Caroline Baxter, said: "Despite signing up its one billionth user earlier this month, Facebook has experienced a phenomenal fall from grace since its IPO. These stronger than expected numbers suggest that Facebook has maybe started to find its way. But it still faces a major challenge.
Facebookâs monthly base also breached the psychologically important 1bn user mark with 60% of these accessing the site via a mobile device. Baxter added: "One billion users is both Facebook's biggest asset and its biggest liability. A seventh of the world's population is a lot of people to get on the wrong side of as Facebook seeks to maximise the amount it makes through paid advertising to satisfy its increasingly vocal investors.
"All kinds of tweaks and changes have been made at Facebook over the past few months, and they've all been focused, unsurprisingly, on ramping up ad revenues. People have been talking about Facebook glitches and shorter fan reach but in reality, they're not glitches at all, just the social network making algorithm changes to turn a profit and appease shareholders.
"Facebook has adjusted its EdgeRank algorithm to 'encourage' businesses and brands to promote posts or use sponsored stories to increase their reach.
"With mobile usage growing exponentially, Facebook has to find a way to monetise more effectively without crowding the limited space there is. The fact that Zuckerberg led with mobile in his statement shows how important it is.
"Like Google, Facebook is experimenting and looking at other ways to boost revenues. It's very wary of being caught standing still. Facebook's new Gifts proposition could be central to this evolution while Facebook Exchange will be a huge opportunity for video ads, and there are also rumours that it is developing a social search engine.
"Facebook is walking one hell of a tightrope at the moment, needing to please both its users and investors, who each want different things.
"But like Google, longer term you get the feeling Facebook won't lose face."