Facebook hits billion users amid revenue worries
By Glenn ChapmanAgence France-Presse
SAN FRANCISCO– Facebook on Thursday celebrated eclipsing the billion-member mark, touting its mission to make the world more social while investors wondered how the service would cash in on its popularity.
Co-founder and chief executive Mark Zuckerberg announced that more than a seventh of the planet’s population resided virtually at Facebook, saying the accomplishment was “humbling.”
“Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life,” Zuckerberg said.
Estranged Facebook co-founder Eduardo Saverin weighed in on his feed at the social network, writing “Congrats to Mark and the entire Facebook team and especially to every Facebook user who built Facebook with every login, invitation, comment and feedback.”
Facebook even released its first promotional video in tribute to the milestone.
Investors, however, did not appear celebratory and Facebook shares slid about 1.6 percent to $21.60 in after-market trading on the Nasdaq.
Analysts are divided on whether Facebook can leverage its massive user base for advertising and other revenues and still remain loyal to Zuckerberg’s goal of making it a service to connect the world.
Of particular concern was how Facebook planned to make money from members shifting to accessing the service on smartphones or tablet computers.
More than half of the billion people using Facebook monthly do so on mobile devices, according to the northern California-based company.
Trip Chowdhry at Global Equities Research remained bearish on Facebook, saying the company has failed to come up with a credible expansion plan.
“OK, one billion users, now what? How do you monetize them?” Chowdhry told AFP. “The problems with Facebook remain the same.”
Facebook revenue this year “will not fly as high” as earlier estimated, according to industry tracker eMarketer.
The company should claim a 14.4 percent share of the $14.98 billion US online display ad market while Google takes a 15.4 percent share, eMarketer forecast.
Only $72.7 million of the social network’s revenue will come from ads served on mobile devices such as smartphones while Google is expected to reap $1.4 billion in that arena, according to eMarketer.
Mobile advertising is a “long-term play” for Facebook with multiplying in the coming two years, eMarketer predicted.
Lou Kerner of the Social Internet Fund said the market is underestimating Facebook’s ability to drive revenues higher.
“Engagement per user continues to grow rapidly, and that’s the metric that will increasingly drive revenue,” he said.
Facebook said it reached one billion monthly active users on September 14.
The company launched a hotly anticipated public offering in May, but has seen its opening share price of $38 tumble amid concerns that it may not be able to grow revenues as users migrate to mobile devices.
Interviewed on NBC television’s “Today” show, Zuckerberg said the company was moving forward despite some rough patches.
“We’re obviously in a tough cycle now and that doesn’t help morale, but at the same time, you know, people here are focused on the things that they’re building,” he said.
“You get to build things here that touch a billion people, which is just not something that you can say at almost anywhere else, so I think that’s really the thing that motivates people.”
Since Facebook’s launch, users have produced over 1.13 trillion “likes,” some 140 billion friend connections and have uploaded 219 billion photos.
The social network has also seen 17 billion location-tagged posts, including check-ins, and 62.6 million songs that have been played 22 billion times.
Zuckerberg, in an interview with Bloomberg Businessweek, said that Facebook’s way of celebrating the billion-member milestone is to have “hackathons.”
“People will be thinking of ideas and working on prototypes and things that we’ll need to do to help connect the next billion people, which I think is pretty cool,” he said.
The growth figures have been clouded by concerns about dubious accounts.
Facebook’s own figures show as many as 83 million may come from dubious sources — duplicate accounts, pages for pets and those designed to send spam.
Some 8.7 percent of the accounts may be dodgy, the company said in its quarterly filing with the US Securities and Exchange Commission.
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Tags: eMarketer , Facebook , Mark Zuckerberg , Nasdaq , One billion , shares , Social network , Stocks
