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Facebook shares plunge after $157m quarterly loss

27 Jul 2012
facebook-nasdaq

Facebook's first ever earnings call saw the firm reveal net losses of $157m for the quarter, sending its share price plummeting by almost 10 per cent to its lowest price since it hit the market in May.

The social networking giant posted revenues of $1.18bn and Facebook also reported monthly active users (MAUs) increase by 29 per cent over last year to reach 955 million. The number of mobile users also rocketed year on year, up 67 per cent.

The company reported 543 million mobile MAUs as of 30 June which would account for more than half of the company's total monthly user base.

"Generally, the earnings have growth. Earnings were solid but not spectacular. The growth was OK but not spectacular," Gartner research director Brian Blau told V3.

Facebook has taken a beating on Wall Street since its initial public offering earlier this year. Stock in the company hit $26.84 as trading closed late Thursday, a far cry from the $38 a share price that the company initially opened with.

However, company executives are hoping their plans for the future will restore some investor faith. 

During the company's first ever call with investors chief executive Mark Zuckerberg reiterated that his company's focus will be on mobile and social ads.

Facebook has been striving to offer more social web advertising since going public earlier this year. The company released its sponsored stories ads as a way to offer advertisers more engaging ad opportunities last May.

Facebook reported it makes $1m in revenue a day from sponsored stories. Yet, company executives say the socially focused ads are only a small part of Facebook's current advertising offerings.

"We're being very careful about the volume of sponsored stories in the news feed because it's so core to the user experience," said Facebook chief financial officer David Ebersman during the call.

"I see sponsored stories as version one of social ads," Blau said.

On the mobile side, Facebook is looking to build upon its app and work to integrate the Facebook experience with existing mobile platforms.

"Facebook is the most used app on basically every mobile platform. So when we think about what we want to do right now, we want to increase the depth of experience in addition to just growing users," Zuckerberg said.

"We want to not just have applications that people use, but also be deeply integrated into these systems as much as possible, and develop an ecosystem where other apps can be built on top of Facebook."

During the call Zuckerberg also addressed the rumours that Facebook is looking to build its own smartphone. He said such an idea, "wouldn't make much sense for us to do".

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James Dohnert
About

James is a freelance writer and editor. In addition to ClickZ, his work has appeared in publications like V3, The Commonwealth Club, CachedTech.com, and Shonen Jump magazine. He studied Journalism at Weber State University.

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