Facebook Inc (NASDAQ:FB) has planned to make Capital investment worth $1.6 billion this year. The social networking site is thriving on the success of its expanding user base in emerging markets like India and Brazil.
Towards the early 2013, Facebook Inc (NASDAQ:FB) capital expenditure totaled to $595 million on constructing data centers and storage infrastructures apart from other expenses. Apart from that, the California based form also spent $221 million on acquisitions and other assets like patents.
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“We anticipate making capital expenditures in 2013 of approximately USD 1.6 billion,” Facebook said in a filing to the US Securities and Exchange Commission (SEC).
Emerging economies fueling growth for Facebook
According to the Industry experts, Facebook Inc (NASDAQ:FB) might be looking forward to earning greater revenue from its mobile advertising base. Helped by the increasing popularity in emerging economies like India and Brazil, Facebook earned revenue of 61 percent or $1.60 billion from advertising in the second quarter of 2013 due to expansion in user base. Google Inc (NASDAQ:GOOG) earned 92 percent of its revenue from advertisers over six months ended in June 30. It is one of the major competitors of Facebook.
Facebook’s monthly active users (MAUs) increased 21 percent to 1.15 billion. India and Brazil have been the key contributors in the second quarter of 2013 compared to the previous year, according to Facebook.
Daily active users (DAUs) increased by 27 percent to 699 million on an average in June 2013 compared to 552 million during June 2012, backed significantly by India, Brazil and other markets.
2Q results inspiring confidence
Facebook Inc (NASDAQ:FB) says that tremendous second quarter earnings will fuel the investment plan to enhance infrastructure. The company earned great revenues due to expansion in user base and increasing in mobile ad revenues, which is now 14 percent of total revenue from advertising.
For the second quarter, net income for Facebook came in at $333 million compared to a loss of $157 million in the previous fiscal’s second quarter. It earned revenue of $1.81 billion in the second quarter, an increase of 53 percent compared to $1.18 billion in the corresponding quarter of 2012.
“Cash used in investing activities during the first six months of 2013 primarily resulted from USD 595 million for capital expenditures related to the purchase of servers, networking equipment, storage infrastructure and the construction of data centres,” Facebook Inc (NASDAQ:FB) said.