High expenses depress Facebook's profits
Facebook continues to grow rapidly. Sales and user numbers of the world's largest online network increased significantly in the first quarter. However, profits fell due to high investment costs and expenses for new developments.
At 509 million dollars, profits were around a fifth lower than in the same period last year, as the US company announced on Wednesday. 1.44 billion users now visit Facebook at least once a month. That is 13 percent more than at the end of the year.
Sales, mainly advertising revenue, grew by 42% to 3.5 billion dollars. However, the strong dollar weighed on the balance sheet. Without this effect, the increase would have been 49 percent according to Facebook. Despite the high figures, Facebook recorded its lowest growth in a single quarter for two years.
In the current quarter, the network expects revenues to be reduced by ten percent due to the strong US currency.
Mobile strong
The proportion of revenue from advertising displayed on mobile devices such as smartphones and tablet PCs rose from 59% to 73%. Almost 800 million members now access the service from smartphones and tablets every day.
Operating expenditure rose by around 80 percent and research and development by 133 percent. Facebook incurred expansion costs for the WhatsApp messaging service, the Instagram photo service and the data glasses manufacturer Oculus Rift, among others.
Company founder Mark Zuckerberg had already announced that he would spend billions on expanding the business. The latest figures therefore came as little surprise. Facebook almost met analysts' forecasts in terms of revenue and slightly exceeded them in terms of profit. Nevertheless, the share price fell by just under two percent in after-hours trading. (SDA)
