If your household or personal care company doesn't have a a Facebook page yet, you may be in the minority. The company said he revenue increased 72%in the first quarter and net income nearly tripled. During a conference call, executives made one thing very clear: The company’s money machine has just begun to spit out the cash.
Two out of three of Facebook’s 1.28 billion monthly users log in to the social network every day, the company said. Americans spend about one-fifth of their time on mobile phones checking Facebook, according to comScore, a research firm.
But when it comes to making money from that affection — by selling ads — Facebook says it has only scratched the surface.
Users are seeing a steady stream of ads in their news feeds, but the company is moving slowly on two promising categories of advertising: full-motion video ads and image ads on its Instagram photo-sharing service. And a plan for a network that would serve its type of targeted ads inside other companies’ mobile apps is still in the early testing phase.
Cruising on existing ad products, the company reported that revenue increased 72 percent in the first quarter and net income nearly tripled. Advertising grew at its strongest rate in three years, with 59 percent coming from mobile ads — double the level of a year ago.
“They are essentially telling investors they will be able to sustain premium growth rates for the foreseeable future,” said Mark Mahaney, an Internet analyst with RBC Capital Markets.
Mark Zuckerberg, the company’s chief executive and co-founder, spent much of a conference call with investors and analysts discussing what Facebook wasn’t yet ready to make money from. Zuckerberg said it would be a couple of years before Facebook tried to make serious money from Instagram, its Messenger app, and WhatsApp, another messaging service that Facebook agreed to buy for as much as $19 billion. The company also agreed to acquire Oculus VR, a virtual reality technology company.
Zuckerberg said he would prefer to first focus on increasing the number of people using each service.
“We believe these apps have a lot of room to grow and will start to be important businesses in the future, but monetization isn’t our near-term priority,” he said.
Facebook had revenue of $2.5 billion in the quarter, up from the $1.46 billion a year ago. The company’s net income was $642 million, or 25 cents a share, up sharply from $219 million, or 9 cents a share, last year.