Facebook Makes A 34% Profit Increase From Last Year

Its revenue grew 49 percent in the fourth quarter, as mobile advertising helped the social network beat Wall Street’s targets for earnings sales. The social networking giant said it now has 1.39 billion active users each month, a 13% increase from a year ago, with 86 percent of them accessing its service on smartphones and other mobile devices.

Mark Zuckerberg, the Facebook’s CEO, said in a statement that “We got a lot done in 2014.”

Facebook’s business has boomed thanks to its mobile ads for smartphones and tablets. Its success contrasts other established Internet companies such as Google Inc (GOOGL) and Yahoo Inc (YHOO) which have struggled as advertisers shift more to mobile apps from personal computers.

Ronald Josey, a JMP Securities analyst said in a statement that “they are taking share of advertising dollars online. They are taking share of overall advertising budgets”, noting the strong quarter.

Investors are betting that video ads, which Facebook started last year, will provide the company’s next length of growth.

The Chief Financial Officer (CFO) of Facebook, Dave Wehner, said in an interview that the company still had a lots to do being optimistic about video. “We have great marketer interest in video. It’s a creative medium that they know how to use effectively.”

Facebook’s revenue growth during the fourth quarter was outstripped by its operating expenses, which grew roughly 87 percent as a result of sharp increases in research and development costs and marketing and sales spending.

Facebook also mirrored a common complaint among US firms, saying its revenue would have increased by 53% instead of 49% were it not for unfavorable foreign exchange rates.

-Channelstv