Facebook on Monday rolled out a WhatsApp update that could threaten Snapchat’s share of the mobile app messaging market.
Read my thoughts I shared with TechNewsWorld here.
New Video Platform on Facebook
Facebook on Tuesday revealed it’s experimenting with making video clips easier for users to find in its mobile and desktop applications. In coming days, a limited number of users will see the additions, which include a video button at the bottom of its iPhone app and in the Favorites menu of its website.
Here is what I told E-Commerce Times, “Video has become a battleground between Google and Facebook. With YouTube, Google is certainly the incumbent leader with a billion global users that spend hours on the site simply watching videos. As of today, Facebook has about 1.5 billion monthly active users. It wants to get in on the action by providing a powerful video platform, Facebook has the opportunity to very quickly create a target-rich marketing platform that has the ability to create substantial revenues quickly.”
You can read the entire article here.
Facebooks Q2 results
Facebook produced US$2.68 billion in ad revenue in Q2, up 67 percent year over year, and mobile ads accounted for about 62 percent of that haul, totaling $1.66 billion. I was quoted in E-Commerce times about this. Here is what I said, “The ability of Facebook to move into the mobile ad space and to monetize it successfully was heavily questioned last year. The company answered in the best possible way — by simply beating market expectations.” You can read the full article here.
800 Million Facebook Shares Came Online
I gave an interview to E-Commerce Times on Facebook. Here is the back story.
Yesterday, 800 million Facebook shares came online. Shares opened at $20.08, and by afternoon were up by more than 11 percent, to $22.17. The increase was unexpected because a stock’s price generally falls when a glut of shares becomes available. For Facebook, the increase was particularly fortuitous, because the stock is worth just over half of its initial public offering price in May. So what happened.
Market dynamics can be complex. So, there is a lot going on behind the scene. To start with, Facebook had a better than expected Q3. It was able to beat revenue expectation. What is even more important, the company was able to jumpstart its mobile business. So, employees and investors have reasons to believe that the company is able take its business to the next level. This is probably the main reason, why we didn’t see people running to exits today.
Secondly, the fact that today 800 million shares were coming online was well known. For those market participants who speculated on a lower stock price it was time to cover any short sales. So, in that regard, todays increase could have been easily just a technical reaction to a market that was simply oversold.
The bottom line for Facebook hasn’t changed. It has to show that it is able to grow its topline. Investors will particularly take a closer look at its mobile revenue numbers.
Facebook Q3 2012 Earnings
Facebook’s earnings report was better than expected. The company had revenues of $1.262 billion in Q3 2012. That’s a 32.285% increase from the same period last year. GAAP Net income was a loss of $59 million mainly due to share based compensation costs and related tax roll expenses. Otherwise the company posted solid operating margins. Wall Street expectations had been slightly lower.
During the earnings call Mark Zuckerberg highlighted some major breakthroughs. First, Facebook has more than a billion people using the site each month. Second, 600 million people are using mobile devices to share and connect. The last three months were crucial for Facebook in terms of its mobile strategy. Facebook made $153 million in sales from mobile advertisements, a revenue stream that didn’t exist seven months ago. Mobile revenue is 14% of advertising revenue in Q3.
Zuckerberg made mobile a strong priority for the company. And it showed. Facebook completed the rebuild of its app for iOS. It improved of the platform for mobile developers by launching new software development kits for iOS and Android as well as a deeper integrating into iOS 6.0.
Facebook had a positive Q3 2012. But the exciting results of its mobile ad business are not the answer to all questions either. Facebook is still playing catch-up. eMarketer estimated the size of mobile at revenue at $2.61 billion this year. $153 million mobile ad revenue is just a fraction to the total market opportunity. Investors will keep watching how aggressively Facebook is able to ramp up its mobile business.