Prime News Ghana

Facebook quarterly profits surge 166% to $2.4bn

By sky News
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A surge in income from mobile advertising is responsible for a dramatic rise in earnings, the social media giant says.
Quarterly profits at Facebook have surged by 166% to $2.4bn (£1.95bn), the tech giant has announced.

But shares dipped by 7% in after-hours trading after it warned that revenue growth would slow.

The huge rise in third quarter earnings came as the social media firm saw an increase in revenues over the same period of 56%.

Much of the rise came from mobile advertising, which accounted for 84% of its total ad revenue in the third quarter.

The company took in a total of $7.01bn (£5.74bn) in the three months before 30 September, beating expectations.

It revealed it now has 1.79 billion users.

Chief executive officer Mark Zuckerberg said in a statement: "We're making progress putting video first across our apps and executing our 10 year technology roadmap."

However, finance director David Wehner said ad growth was on course to slow "meaningfully" as it limits the level of adverts it puts before users to avoid turning them away.

He also indicated that 2017 would be a year of aggressive investment.

Another of its subsidiaries, photo sharing site Instagram, has also seen its advertising base grow, the firm said.

The firm had 500 million users as of June.

But analysts say the firm's other apps, WhatsApp and Facebook Messenger, face increasing competition.

There are also questions as to how long Facebook can continue to boost mobile ad revenue, given limits to the number of ads that can be shown to each user.

The firm has continued to offer new innovations, including Marketplace, a feature that allows people to buy and sell items locally, and to develop its use of video as it tries to catch up with Google's YouTube.