I remember that a few years ago and a few years before that, I saw the headlines that Facebook as a business was failing, or that it would soon meet its end. Whoever made that prediction would be eating his/her words by now. The social network has around 1.79 billion monthly active users*, 1.1 billion daily active users and both numbers are rising. Facebook has also signed contracts with various celebrities and media organizations to make exclusive video content for the site. It has also introduced the option to shop online, tag products in videos, photos, and posts and even made all your posts searchable. It’s even competing with YouTube in terms of video views and has invested heavily in 360-degree video. So with all that, is it really surprising that Facebook has nearly tripled its profits.
Facebook posted a net income of $2.37 billion this quarter, a 165% increase compared to last year. Total revenue rose by about 55.8% to $7.01 billion compared to 2015. The site made most of its money through mobile advertising, which made up 84% of its ad revenue for the quarter. In fact, 1.055 billion users are mobile-only while 1.66 billion monthly users frequently use their mobile devices for Facebook.
However, this doesn’t mean Facebook is resting on its laurels. It has blown through $4.35 billion in the first nine months of 2016 (24% increase over the last year) and has invested heavily in science and technology. A testament to that is the Aquila drone, which is being designed to fly for 3 months at a time and deliver internet via laser to developing countries. There’s also the various messaging apps and services Facebook has invested in this year including Lifestage, Messenger Day and Instagram stories. These are all in a bid to compete with Snapchat and to keep the crown with Facebook.
It’s working too, Instagram Stories has 100 million daily active users and Facebook Live has grown by four times since May. Facebook stars or stars that use it to communicate with their fans are increasingly using the latter to broadcast their message to the world. Whether it’s a Q&A with fans or a special video for Halloween, the celebrities are doing it. Facebook has also made sure its video content is seen by everybody each day. Scrolling through your Newsfeed, you can see each video start to play. And within three seconds, a view is counted. People don’t even open videos for sound anymore, which is why more and more videos come subtitled on the site.
Facebook has played its game well. It hit 1 billion users on Messenger this year as well as introduced Instant Articles and Chatbots to the application. It introduced integration with PayPal in the US and Messenger Lite for developing nations. It invested in a Trans-Atlantic Internet Cable from Europe to America along with Microsoft to boost connectivity. So it deserves its rise in profits. It’s taken a lot of initiative and redefined what a social network can do.