The world’s largest internet social network, Facebook’s, profit and revenue for the fourth quarter rose on mobile advertising growth.
This boosted Facebook’s revenues in 2014 to nearly $12.5 billion — rising above $10 billion for the first time — compared to just under $7.9 billion in 2013.
Revenues for the October-December quarter rose 49% to $3.85 billion from $2.59 billion in the year-ago period. It was well ahead of Wall Street estimates $3.77 billion revenue. But, revenue growth was the weakest since the start of 2013, and spending rose faster.
Net income rose to $701 million in the three-month period against $523 million in 2013.
The company’s expenses also shot up, as its CEO Mark Zuckerberg had warned months ago. It is expected to grow further in 2015, the company said.
However, overall the year ended well.
“We’re very pleased with the growth of our business,” Zuckerberg said in a conference call with investors to discuss the results on Wednesday.
Expenses rose by 87% to $2.7 billion during the quarter under review, mostly on account of stock payouts to employees. The company is likely to spend more in 2015, on expanding acquisitions such as WhatsApp, Instagram and Oculus Rift, the virtual reality headset.
The company’s mobile ads accounted for 69% of advertising revenue in the fourth quarter, or $2.48 billion.
Over two-thirds of its users — 86% of 1.39 billion — access Facebook on their mobile devices, smartphones and tablets, the company said.
Its market share is rising, analysts said, compared to rivals Google and Yahoo.
“They are taking share of advertising dollars online, overall advertising budgets,” said Ronald Josey, a JMP Securities analyst.
But, the overall growth in daily active users is slowing down — went up by 3%, which is the lowest sine 2012. According to some quick math by The Wall Street Journal, Facebook earned $2.81 per user, up 31% over the same quarter last year.