Facebook stock fell 2% on Thursday, but it was regaining some of that today as investors chewed over the company’s latest earnings report.
To be sure, there were plenty of good numbers from the quarter, and one that investors didn’t like.
— Earnings of 50 cents a share, 3 cents better than expected.
— A daily active user count nearing 1 billion — 968 million, up 17% from a year ago. And 844 million of those were mobile, up 29%.
— Spending up 82% as Facebook tries all sorts of new things. That curbed short-term profits, which investors of course didn’t like.
But in a scan of Facebook news on the Net, three things jump out, and they all seem positive, or at least intriguing, for the company’s future.
First, Facebook is racking up mobile dollars, and that is where advertising revenue seems to be heading.
Second, one of those “crazy” spending plans involves drones that can spread Internet access virtually anywhere. It’s anyone’s guess whether that investment will pay off, but it’s giving the company good buzz, and it’s the sort of innovation that big thinkers and real leaders try.
Third, and perhaps least noticed, Facebook chief Mark Zuckerberg is playing the long game, realizing that alienating users for some short-term revenue growth doesn’t make sense. The indication of this came in his remarks on expanding advertising to Facebook’s messaging app. Facebook’s Messenger app has 700 million users, and its WhatsApp has 800 million, and investors want to see revenue from them. But Zuckerberg said that could wait, and should wait, just as it had with placing ads in people’s news feeds.
“If you go back to 2006 and 2007, there were a lot of people that were encouraging us to just put banner ads and inorganic content into the experience,” Zuckerberg told analysts. “And what we decided was that over the long term, the ads and monetization would perform better if there was an organic interaction between people using the product and businesses.”
To do that, Facebook let businesses set up pages, and then advertise in the news feeds of people who had subscribed to those pages. The ads even had a progression, from “sponsored stories” to more flexible news feed ads to auto-play video ads.
How that strategy plays out with Messenger and WhatsApp and Instagram will be interesting to see. But Zuckerberg doesn’t want ad money now at the expense of turning off, and even losing, users with advertising messages that there’s little chance of them wanting to see.