Facebook had been ramping up its mobile-centric endeavors for quite some time. It appears those efforts are paying off. However, the social media giant’s equally rising expenaditure towards the same, has partially diminished the impact.
Ad Revenue, is Facebook’s largest aggregative source of income. Fortunately for the company, its mobile-centric efforts have been reaping benefits on a steadily ascending manner. At present ad revenue from the social portal’s mobile based endeavors contribute about 30% of the company’s total ad revenue. However, the trend should go even higher & at a faster pace to be counted, shared Ben Schachter, a financial trends analyst at Macquarie Research, “It needs to be higher for people to get really excited about trend lines”.
What’s working for Facebook?
Revenue from Advertising had declined abruptly last year. Additionally the downward trend continued for quite some before it plateaued. But, taking a strong note of this disastrous phenomenon, the company worked diligently on almost all of its platforms. Out of the efforts, the company was able to come up with a new news-feed. However, the single biggest feature was the ‘Unified Search’ feature that captured the attention of its users. Riding on the enhanced traction of these new features, Facebook has been able to bring back some of the momentum in its display advertising segment. Least one might forget, there was also Facebook Home, an Android only home screen replacement that positively reinforced the portal’s presence on the mobile front.
Though all the endeavors have won public approval, it also indicated the excessive spending Facebook committed to revamp the entire platform. Hence, though the company has been making more money as compared to last year, it is burning much more. Facebook’s spending has risen 60% on an Year-on-Year Basis, as compared to 38% rise in revenue.
Where Facebook is heading?
The expenditure on such grounds-up rework is only one-time. Once products like Facebook Home & Unified Search have been adopted by the masses, the company has to merely maintain these & add more features to make the same more appealing to advertisers. With selective feeds & promotional posts, the company can easily insert advertisements even within the mobile platforms too & quickly start making more money than it is spending.
What do you think?
Image Courtesy | euronews