Facebook Inc (NASDAQ:FB) will complete ten years of its existence this year. Since its inception in 2004, the social networking giant has undergone massive changes to attract users and of course, advertisers. Facebook has added News Feed, photo albums, Hashtag, Trending Topics, improved privacy settings and ads. But recent reports indicate that the Menlo Park-based company is losing its youthful edge, especially on mobile. More and more young people are shifting to “cooler” apps like Snapchat, WhatsApp and WeChat.
Facebook executives avoid talks of “teen problem”
A lot of people wonder if Facebook Inc (NASDAQ:FB) has been successful in keeping teens interested. But the company’s Q4 results shifted the focus from teens to advertising revenues. The company’s revenues jumped 63% to $2.59 billion. And GAAP earnings soared to $523 million from just $64 million in the same quarter last year. Even during the conference call, Facebook executives, including Mark Zuckerberg, avoided talking about the company’s teen problem. Instead, the social networking company is entirely focused on boosting advertising revenues.
Initially, Facebook Inc (NASDAQ:FB) had to convince marketers that its ads are effective. But now the company has enough data to prove that social ads really work. Sheryl Sandberg said during the call that News Feed ads generate specific and significant return on investment. The company has refined its tools, going far beyond its website. Facebook tracks every user activity on the site, even your private messages. The Menlo Park-based company has combined its own user database with those of Datalogix Inc, Alliance Data Systems Corporation (NYSE:ADS) and Acxiom Corporation (NASDAQ:ACXM). All that is aimed at creating a detailed profile of users so that advertisers can target ads more specifically.
Facebook user growth slows
During the fourth quarter, Facebook Inc (NASDAQ:FB)’s daily active users (DAUs) jumped 22% to 757 million year-over-year. Meanwhile, the number of monthly active users (MAUs) went up by 16% to 1.23 billion. The DAU and MAU growth was unimpressive, which was expected. But that’s not a problem yet because Facebook is too busy monetizing the data of more than 1.2 billion users it has collected over the past decade. As a result, the company’s average revenue per user jumped 38.96% from $1.54 in Q4, 2012 to $2.14 in the latest quarter.
Facebook Inc (NASDAQ:FB) shares skidded 1.38% in pre-market trading Friday to $60.24.