The world’s largest social media site, Facebook, saw profits skyrocket this past quarter as it continues its expansion into new markets. It`s been twelve years since Facebook was founded by Mark Zuckerberg, and four years since its IPO. Unlike so many social media sites, Facebook is continuing to achieve rapid growth with 51% growth in the final quarter of 2016.
Exceeding all expectation, Facebook achieved profits of $3.568 billion in the quarter, bringing the profits for the year to $27.6 billion. Alongside profits, the share price has also gained, rising 2.52% as a result of some after-hours trading.
¾ of internet using adults have Facebook in the US as of January 2015, and the most recent statistics show that the website hosts 1.86 billion active users each month. Each user brings in $18.25 in ad revenue.
A recent change in Facebook’s ad tactics has pushed their profits so high. Revenue from mobile ads now make up 84% of ad revenue. With the smartphone revolution, more people than ever are browsing on their mobiles. Shifting the targeting of ads from the website to the app, Facebook is able to maximize the profit for each ad slot.
The research firm eMarketer has predicted that Facebook will continue to profit from mobile advertising in 2017, and take in an estimated $29.71 billion. This would represent a 35.2% increase in profits, and although this is slightly less growth than the past quarter, it is still a huge boost in profits. Facebook says that its slowdown is going to be caused by their plan to reduce the number of ads each user views.
This decrease in ads per person will hinder the company, but it will most likely not cause serious concern for Facebook. In addition to having a stable and thriving market in the US, it is expanding rapidly in Asia and other parts of the world that were previously untapped.