Facebook profits fall

FacebookSocial notworking site Facebook has seen its profits fall as it sharply increased spending to boost mobile revenue and future growth.

Expenses will grow 55 to 60 percent in 2015 from last year, including an 82 percent jump in the second quarter to $2.77 billion, it added.

Chief Operating Officer Sheryl Sandberg said the social notworking site was investing in the next set of services and what will be future investments like Messenger, WhatsApp and Oculus Rift.

Messenger has more than 700 million users, and the app has been downloaded more than one billion times on Android, Google’s mobile operating system, Facebook said.

Facebook will add new advertising formats to photo-sharing app Instagram, which was launched in Brazil, Germany and Japan in the second quarter, Sandberg added.

Macquarie Research analyst Ben Schachter said the costs and spending met expectations. “We think the company has many opportunities ahead of it so we want to see them investing heavily in those investments,” he said.

Facebook shares fell more than 3 percent in after-hours trading.
Facebook has 1.49 billion monthly active users as of June 30, up 13 percent from a year earlier. Of these, 1.31 billion accessed the service through mobile devices, a rise of 23 percent.

Daily active users increased to 968 million in June, up 17 percent from the same month last year.

For the quarter, revenue jumped to $4.04 billion from $2.91 billion.

It lost a bit due to the effects of a strong dollar, revenue would have been about $33 million higher.

Advertising revenue grew 43 percent to $3.83 billion. Mobile ads accounted for 76 percent of that, up from 62 percent in the same quarter last year.

The average price paid per ad rose 220 percent while total ad impressions, a measure of the number of times an ad is viewed, fell 55 percent.