Facebook’s Revenue Soars

Another big quater for Facebook, as its latest earnings report shows revenue per user up 30 percent in Q4. Per user, Facebook generated $4.83 in revenue in the fourth quarter,  up from $3.73 a year earlier.

All in all, the company’s revenue climbed 51 pecent year-over-year to $8.81 billion.

And, by in large, the rest of the numbers were fairly impressive as well.  Facebook added 270 million new users in 2016, bringing its total monthly user base to 1.86 billion. That represents the biggest pick-up in users since Facebook went public in 2012. The bulk of that growth came from outside the U.S. — particularly in the Asia-Pacific region. However, the U.S. and Canada were the source of its increase in revenue.

“In most mature markets, to see people come on the platform more often, that’s a very good trend,” said JMP Securities analyst Ron Josey. “And the mature markets are your most profitable.”

Facebook’s quarterly profit leapt to $3.57 billion from $1.56 billion a year earlier.

The political race — and the unending wars family members had over it on their pages — was good for Facebook. But, according to COO Sheryl Sandberg, the election itself was only slightly influential on FB’s business during Q4 — political spending wasn’t even a top 10 advertising for Facebook.

“No one event is that big for our business,” she said. She also said Facebook was increasingly drawing revenue from a broader pool of advertisers.

As for what’s next: video.  Marc Zuckerberg told analysts that “video-first” is the new orientation of Facebook, with videos being increasingly embedded throughout the site.

“I see video as a mega trend on the same order as mobile,” Mr. Zuckerberg said Wednesday.

Facebook confirmed that it is working with content creators to make specialized video content — and will be exploring relationships to content publishers that involve payment in the future.

The incredible power of growth in Q4 was the fifth straight quarter of revenue increases of at least 50 percent.  However, according to Facebook, that will be slowing down this year.

Executives on Wednesday reiterated warnings first made last fall that they will be slowing down the addition of more ads into the news feed — and that the result will probably be a fairly notable hit to advertising revenue.


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