Boost in mobile advertising contributes significantly to strong showing as performance beats Wall Street estimates
By Barbara Ortutay, Technology Writer
NEW YORK (AP) --Facebook grew its advertising revenue by 64 percent in the third quarter, helped by a boost in mobile ads that are becoming an increasingly large chunk of the social networking giant's overall advertising business.
The steady increase indicates that Facebook has succeeded in steering advertisers to its mobile platform at a time when most of its users are using Facebook on phones and tablets. Investors were initially worried about the desktop Web era-born company's ability to succeed in mobile advertising, but those concerns are long gone.
Though Facebook's results surpassed expectations, investors sent the company's stock down sharply not long after the results came out, possibly spooked by comments during a conference call that 2015 will be a "significant" year for expenses. The company said it expects costs to grow by 55 percent to 75 percent next year as it ramps up investment in its work force, growing existing products and new areas such as WhatsApp, Oculus and video.
This year, Facebook spent $22 billion in cash and stock to buy the messaging service WhatsApp and about $2 billion to buy the virtual reality company Oculus.
The Menlo Park, California-based company's stock fell nearly 11 percent in extended trading. Daniel Morgan, a portfolio manager at Synovus Trust Company, who focuses mostly on technology stocks, was surprised by the downturn.
"Unless there is something I am missing, I didn't see anything in the report that would cause any concern," he said, adding that the only thing he can think of is that the stock has done so well that expectations were extra high, and while Facebook did better than expected, they didn't blow it out of the water.
"Maybe it's just not enough to answer the Street's desire to have unbelievable numbers," he said. "It's kind of a scratch your head kind of situation."
Advertising revenue at the company totaled $2.96 billion. Mobile ad revenue, a closely watched figure, was $1.95 billion, or 66 percent of Facebook's total advertising revenue for the quarter. That's up from 62 percent in the second quarter and 59 percent in the first three months of the year. The 10-year-old company began offering mobile ads in 2012.
Now, Facebook is expanding into highly lucrative video ads, and earlier this year re-launched Atlas, a tool for marketers to better target people across "devices, platforms and publishers" and to measure how well the ads work.
The Atlas move and the acquisition of LiveRail, an online video advertising platform signal that an "important shift is under way at Facebook," says Debra Aho Williamson, an analyst at research firm eMarketer. Facebook is "becoming much more ambitious in offering digital services far beyond what the company was initially created to do as a social network."
The company has been on a roll lately, and its stock hit an all-time high of $81.16 on Tuesday before the results came out. That's more than double its initial public offering price of $38. Both the troubled IPO and the company's lagging stock price seem like a distant memory. Still, Facebook has had to be vigilant in attracting new users, especially outside the U.S., and ensuring that existing members return day after day.
Facebook had 1.35 billion average monthly users as of Sept. 30, an increase of 14 percent from a year earlier. Daily users totaled 864 million, up 19 percent. Mobile monthly active users, meanwhile, were 1.12 billion, up 29 percent from a year earlier.
While Facebook has been growing its share of the worldwide digital advertising market, it's still a long way from catching up to rival Google Inc. In 2013, Facebook had a nearly 6 percent share of the market compared with Google's 32 percent, according to eMarketer. This year, Facebook is expected to grow its slice to nearly 8 percent, while Google's should decline slightly, to just below 32 percent.
Overall, Facebook's earnings nearly doubled to $802 million after paying preferred dividends, or 30 cents per share. Revenue rose 59 percent to $3.2 billion. Adjusted earnings and revenue both beat Wall Street's estimates.
Jennifer Kent On Why Her Feature Directing Debut, “The Babadook,” Continues To Haunt Us
"The Babadook," when it was released 10 years ago, didn't seem to portend a cultural sensation.
It was the first film by a little-known Australian filmmaker, Jennifer Kent. It had that strange name. On opening weekend, it played in two theaters.
But with time, the long shadows of "The Babadook" continued to envelop moviegoers. Its rerelease this weekend in theaters, a decade later, is less of a reminder of a sleeper 2014 indie hit than it is a chance to revisit a horror milestone that continues to cast a dark spell.
Not many small-budget, first-feature films can be fairly said to have shifted cinema but Kent's directorial debut may be one of them. It was at the nexus of that much-debated term "elevated horror." But regardless of that label, it helped kicked off a wave of challenging, filmmaker-driven genre movies like "It Follows," "Get Out" and "Hereditary."
Kent, 55, has watched all of this — and those many "Babadook" memes — unfold over the years with a mix of elation and confusion. Her film was inspired in part by the death of her father, and its horror elements likewise arise out of the suppression of emotions. A single mother (Essie Davis) is struggling with raising her young son (Noah Wiseman) years after the tragic death of her husband. A figure from a pop-up children's book begins to appear. As things grow more intense, his name is drawn out in three chilling syllables — "Bah-Bah-Doooook" — an incantation of unprocessed grief.
Kent recently spoke from her native Australia to reflect on the origins and continuing life of "The Babadook."
Q: Given that you didn't set out to in any way "change" horror, how have you regarded the unique afterlife of "The... Read More