Facebook Inc, Google Inc Continue To Rule In Mobile Ads

Facebook’s latest quarterly report card again showed its magnetism in attracting big brands. It, along with Google, continues to  grab the lion’s share of the rapidly growing mobile ads sector, says a report from The Wall Street Journal.

Facebook Inc, Google Inc Continue To Rule In Mobile Ads

Google leads but Facebook catching up fast

Though Google is still leading in the mobile advertising market with a 35% share, Facebook is narrowing the gap rapidly. eMarket, a market research firm, says both firms are ruling the market with more than 50% of the $69 billion worldwide mobile-advertising market.

Apart from mobile ads, Google and Facebook compete in many more areas such as videos, virtual reality, search, etc. Facebook CEO Mark Zuckerberg informed investors during their conference call that the social network now gets 1.5 billion searches a day. To up its video growth further against Google’s YouTube, the social network is planning to share its ad revenue with video creators through a bidding process. This will definitely motivate more users to come up with high quality videos.

Three-fourths of Facebook’s total revenue, which was up 39%, came from mobile ads. Brian Wieser, an analyst with Pivotal Research Group, says it is “remarkable” for “a company this size to keep growing that fast.” Facebook’s numbers stand in sharp contrast to rivals such as Twitter and Yelp, which also rely on mobile and advertisers for their growth.

“Remarkable” growth

The social network’s second quarter revenue came in at $4.04 billion, up from $2.91 billion from the same period last year. But due to heavy expenses, its net income declined 9.1% to $719 million. Expenses for the quarter jumped 82% with research and development costs almost rising by 100%.

Previously, Zuckerberg did inform investors of the rising investments in new recruits, data centers and future projects like  virtual reality and solar-powered drones. However, the social network trimmed its expense growth forecast and now expects it to rise 60%, down from the 65% forecast previously.

Facebook follows a strategy of investing more to attract customers, and this was reflected in its quarterly revenue growth. Facebook informed investors that it now has a monthly active user base of 1.49 billion, up from 1.44 billion as of March 31. And its daily active user base has grown to 968 million from 936 million in the first quarter. Zuckerberg also said users spend at least 46 minutes a day on the platform and its other assets, such as Messenger and its photo-sharing app Instagram. Analysts estimate that around one-fifth to one-third of users’ time is spent on Facebook-owned apps on mobile devices.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com

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