Facebook’s mobile advertising business grew by more than 50pc in the second quarter, the company said in its earnings report on Wednesday, as the social network continued to establish itself as the venue of choice for an ever-growing array of online advertisers.
In contrast, Twitter shares opened more than 10pc lower yesterday after it disappointed investors with stagnant monthly active user growth in the second quarter.
Shares in Facebook, which now owns four of the most popular mobile services in the world, rose more than 4pc to about $173 in after-hours trading. Through Wednesday’s close, the stock price had climbed nearly 44pc this year.
Facebook now has more than 2 billion regular users, and has been squeezing more ads into its Facebook News Feed and adding more ads to its photo-sharing app Instagram, which has more than 700 million users.
Founder and CEO Mark Zuckerberg said the company was now turning attention to monetising its two messaging services, Messenger and WhatsApp, which have more than 1 billion users each.
“I want to see us move a little faster here but I’m confident that we’re going to get this right over the long term,” Zuckerberg said in a conference call with analysts.
In addition, accelerating its push into video is part of an effort aimed at taking advertising money from the television industry.
Facebook is expected to start a video service that will include scripted shows within weeks, a sharp change for a business built on user-generated content.
Facebook said total revenue rose 44.8pc to $9.32bn in the second quarter of the year. Growth was even steeper in mobile advertising, which increased to nearly $8bn.
Mobile ad revenue accounted for 87pc of the company’s total advertising revenue of $9.16bn in the latest quarter.
“They’re killing it on mobile,” Needham & Co analyst Laura Martin said, referring to Facebook’s suite of apps. “They are the de facto mobile advertising monopolies and that’s a really big deal.”
On Monday Google owner Alphabet reported a 21pc increase in quarterly revenue, although it started the quarter from a larger base than Facebook did.
Facebook said that about 2.01 billion people were using its service monthly as of June 30, up 17pc from a year earlier.
In contrast, Twitter disappointed investors yesterday, with stagnant monthly active user growth in the second quarter.
Despite its appeal among celebrities and US President Donald Trump, Twitter has struggled to sustain user growth even as it invests in features and live content to help draw viewers and boost user engagement.
It is in stiff competition for advertising dollars with other platforms like Facebook and Snapchat.
The company also reported a wider quarterly net loss and lower revenue, and said it did not expect its total revenue growth to pick up in the second half of the year.
Twitter had 328 million average monthly active users (MAU) in the three months through June 30, unchanged from the previous quarter.
“If you really can’t accelerate MAU interest given the daily tweets from POTUS (Donald Trump), not sure when you will,” said Michael Nathanson, senior research analyst of MoffettNathanson Research, referring to an acronym for the president of the United States.
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