Facebook share price dips as spending soars

 
Sarah Spickernell
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The social media giant has invested heavily in mobile advertising (Source: Getty)
Facebook reports positive earnings one again, but investors aren't impressed by it's expenditures.

The figures

During the second quarter, Facebook's year-on-year revenue went up 39 per cent to $4.04bn (£2.59bn), while earnings-per-share increased from 42 cents to 50 cents.
The results were marginally better than the $3.99bn revenue and 47 cents-per-share analysts expected, but there was simultaneously an 82 per cent increase in spending by the company as it focused on growing the mobile side of its business.
During after-hours trading, Facebook shares initially dipped 4.2 per cent in value to $92.90, and are now down 0.7 per cent at £96.30.

Why it's interesting

It's been a great year so far for Facebook, which now has 1.49bn monthly active users. Yesterday, shares were up 22 per cent for the year to date when markets closed.
Facebook faces stiff competition from a number of smaller, newer firms, but it continues to perform better than its rivals, partly because of its dedication to shifting platforms. In April it reported that the majority of its users and almost three-quarters of its advertising revenue came from mobile devices.

What Facebook said

Mark Zuckerberg, founder and chief executive, commented:
This was another strong quarter for our community. Engagement across our family of apps keeps growing, and we remain focused on improving the quality of our services.

In short

Facebook continues to lead the social media industry, but it is having to fork out huge sums to stay ahead of its competitors. Today's spending figures for mobile reflect the dilemma it faces.

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