The 3rd quarter results from Facebook suggest contradictory
results for the world’s biggest social network site. The
results are extremely positive in that they show that Facebook has finally
managed to crack the problem of increasing number of users on mobile rather than
desktop. Their results show increased revenue of approximately $2billion and
that mobile advertising accounted for half their advertising revenue.
However, despite this success there were two announcements made by the
company which trouble investors:
The first potential problem is an area in which Facebook and its investors
will have to pay attention to. This is the decrease in younger teens usage of Facebook.
With so many other online social platforms Facebook has to retain its image as
new and exciting as teens come on to the platform – they do not want to use a
site which their parents, teachers, and the older generation are all using.
The second potential issue which is being discussed it that Facebook have
decided not to add at this time additional adverts on its newsfeed. Although
this worries investors from a revenue standpoint, from a user’s standpoint it
comes as a relief. The odd advertisement in a newsfeed can be a welcome
distraction from the continuous self-advertisement of friends holidays,
successes and smugness. There are also not so many adverts that it ruins the experience
of seeing what friends are up to. Facebook can always increase adverts here in
the future but in my opinion Facebook have realised that by not increasing the
number of adverts on Facebook they are retaining the experience. If they do
start ramping up the number of adverts in newsfeeds this could slow down
Facebook’s user growth, either by number of users per day or even number of
members as people get increasingly irritated by a newsfeed of adverts they did
not ask for and do not want. Facebook is acting cautiously by acting like and
also delaying the roll out of video advertising. They understand that they are
still breaking new ground in the advertising social network industry and are
not looking to risk disgruntled users.
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