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Facebook Q3 2016 Results (fb.com)
154 points by blawson on Nov 2, 2016 | hide | past | favorite | 140 comments



Tried Facebook ads for Pokemon Go ( 2nd largest Facebook group in my country - Belgium), had some success there ( 330.000 people reach / week for a month). But it's not worth it for regular businesses. I started a webshop and Google AdWords seems to be the way to go.

Side note, we did events. One Facebook group had 2x as many members and was also spanning the Netherlands, they had 1/10th of our ticket sales. We were the first to combine amusement parks with Pokémon Go ( and cheaper then normal tickets, our revenue was a % on the ticket price)

Facebook seems to be an empty bucket. The ones who share your posts, share everything from everyone, while you give things away for free. It's the only way to receive a lot of likes, but those aren't the people you want and going to buy your stuff.

You aren't anything with likes. Invest in newsletters and a decent email campaign, that way you don't have to pay for the people that 'subscribed' to you, to let them see posts.

Ps. Pokemon Go was 0,03 € / like. Normal businesses pay 1€ / like in my experience. Don't go that road :)

Ps2. I don't do remarketing too. But that's personal preference, as i don't want to stalk people. I want them to find me, when they are looking for me

Ps3. AdWords for me is 1€/ day, which is the minimum. And I'm quite happy with it for my niche, which gives me 10 visitors and 1 purchase every 2 days ( pretty high margin)

Ps4. If you want to go on Facebook, remember you have to pay for: promoting your post, promoting your page and promoting your website. So facebook passes 3 times at the cash register. Pokemon Go was all on max for several days, which is 50€ x 3 per day! And in case you forgot, likes !== Customers and you still have to write good content :)


Facebook's encouragement of businesses to build FB pages, then have their own customers like them on Facebook seemed like a win-win--a mutual leveraging of cross-engagement.

But, Facebook's later flipping the switch to make those businesses pay to reach their own customers was a completely underhanded bait-and-switch.

Still leaves a bad taste in my mouth all of these years later.


I absolutely agree.

Also, the 'find people by their likes' is just good in theory. All of your likes are going to be of people who share everything


They probably also have 1000+ friends, half of whom have hidden their activity because it's all spam


Yeah, this was not great. I worry Google might do something similar with email and their attempt to curate it with Inbox and the growth of ads in Gmail.

They have the ability to control access and marketers currently pay a known fixed or tiered price for sending email to somewhat reliably reach their full target list (minus bounces). I'm sure Google is salivating over turning that into a dynamic auction based model with them as the gate keeper of one of the most widespread and valuable email clients out there.


Hard lesson for companies that you need to own your subscribers, not lease them from twitter/facebook/instagram.


What's worse is that it's "buying" them (via hard-won marketing efforts), giving them to FB, then paying FB to lease them back.

But, of course, that wasn't the original deal--else no one would have signed up for it.


This is why I'm hesitant to switch my business Instagram account to be an official business page. I don't sell anything so the ecommerce/insight tools don't really appeal, but I can definitely see the future of having to "boost" posts to you followers.


But meanwhile Facebook users have proven to be completely unwilling to curate their own feed, so if Facebook didn't curate which pages you saw stuff from, everyone would leave Facebook because "it's all just ads".


How is this different to Google encouraging SEO and making crawler friendly websites then adding 4 ads on top of organic results? Especially for branded content! In the industries I've worked in we've seen organic search as a % traffic drop due to competitor (and our own) PPC.


This not the case at all. Forexample, there are cartoons that up very high in my feed because I click on them every day. If you something of quality that your users want, you don't have to pay to get to see. In fact they will share.


I've been running >$1M annually in ads on Facebook for real businesses (both B2B and B2c) to great success. They have a higher CAC than AdWords, but perform substantially better than display ads, and consistently bring in clients that are top of funnel, but turn out to be high quality.


It seems to be your business: https://www.survata.com/ ( no offence, i'm just carefull when it's someone's work, but you did mention it)

i'm curious about any real stats actually :) - Eg. http://www.denverpost.com/2012/07/03/gm-reconsiders-paid-fac...


I don't mind discussing it. It's not a secret, as anyone on Facebook could simply visit our website and look forward to a Facebook ad :)! I first started running large scale Facebook campaigns at another employer (b2c) in 2013, ran them until I left there in mid-2014, and after a bit of a step away from them while moving across the country and getting a new job, we've begun running them again. While I can't share specific stats, we've acquired real leads that have turned into customers at a cost that we're comfortable with right now. I'll admit that at a company with different unit economics and lifetime behavior, the calculus would be different, but my point was simply that Facebook ads do work for businesses, if not all businesses. Also, have to give Facebook credit for continually improving the product (though the Power Editor remains insanely frustrating and I'd do anything for an offline AdWords Editor for Facebook). If you'd like to discuss in more detail, shoot me an email and I'll answer any questions I can.


There is no point in acquiring page likes, for two reasons: first, as you mentioned, after you paid to acquire the like you'll still have to pay to reach those people with your campaign (organic reach is peanuts these days); second, targeting ads at fans rather than any other segmentation makes no difference for your campaign cost structure.

To be fair, all things being equal, Fans have better CPM than interest-based clusters ("people who like such pages and such topics") on average. But that's not a Facebook incentive, it's merely a statistical correlation between someone having liked your page and the likelihood of their reaction to your ads being positive (which drives the relevance score up, in turn bringing the CPM down). But you can find even better results with proper behavior-based targeting (in particular remarketing).

When I'm surveying the competition, net fan growth is a useful metric to keep in hand because it leaks information. High churn is indicative of sponsored content targeted towards fans only (which usually comes hand-in-hand with outdated content strategies such as increasingly like-bait content and equally distributed total engagement across many posts), while positive net fan growth can be coupled with total engagements and views and some qualitative observations in order to ballpark competitor's budget and broad-strokes strategy.

If I'm being honest, looking at the cost-effectiveness of both branding and performance campaigns on Facebook, it remains a secondary channel and gives no signs of ever meriting a prime role in my campaigns. Production costs, data lock-in opportunity costs and its highly kafkaesque tools and available metrics only make things worse.

In my years in advertising it's been repeatedly demonstrable that about every other DSP performs better than Facebook (across all industries and campaign goals I've worked with), whose only clear strength seems to be having massive inventory with a pretty decent coverage, making it a one-stop-shop for small and medium businesses and making itself a required line item in large companies media planning.

That's great for them, I'm sure, but they simply don't deliver as well as about anything else I work with, and that translates into a "when in doubt start by decreasing the Facebook budget and reallocating it somewhere else" pattern that you see everywhere. That may turn out to be a long term threat for them, I don't know. Their recent closing of FBX is telling: I for one had better results running Facebook campaigns through 3rd party DSPs than through Facebook itself, even at a premium on the CPM.

----

edit. – I realize I mentioned CPM 3 times and no other metric, here's why: most Facebook optimizations involve finding the cheapest inventory that is on-target (for branding campaigns) or high-conversion (for performance campaigns). So trying to grok your campaign results always leads back to CPM, even though my job is usually to deliver something more useful to the client such as low CPA, high ROI or even additional reach with better CPP for their TVC campaign.


I wonder how much better performance they could deliver if they improved their attribution tools, ad interface, bid rules, etc.

Part of the problem is that if you do anything at scale with FB you really should be using a PMD. For many things the Ads Manager and Power Editor are just painful.

I'm also not in love with how conversions are tracked and optimized against in terms of how they try to lump everything possible in as a conversion to show a higher number and try to convince advertisers that all those components have equal value.


Running an FB campaign focused on performance is, like I said, a game of finding the lowest on-target/high-conversion CPM (conversely: finding your intended audience at its cheapest). It's not in Facebook's interest to disclose this information too easily, as part of their profit margin comes from squeezing campaign spread.

So my thinking here is that their tools are poor at performance optimization by design, so that we have to jump through hoops, experiment and throw money at different audience mixes in order to find just the right creative-segment-budget allocation. So I don't think that is headed to change so long as they are allowed to keep playing black box and walled garden.

I was astounded how easy it was to get better CPA/ROI running Facebook campaigns on, say, DBM or Criteo even at a premium on the CPM. It goes to show just how lacking their tools are in fast audience and creative optimization.


So there's definitely something to be said for tools that can optimize the best to deliver higher ROI despite higher CPMs.

That said, I'm not sure I fully agree on where FB's interests lie. They've come under a LOT of fire over the past couple of years for various things that people felt inflated the value of their inventory, and so helping advertisers prove they can drive more value and provide tools to help them scale more easily would all be things that should help their bottom line. Particularly when marketers have to make a budget allocation decision towards something that might be a bit more mid/bottom funnel like SEM.

So to compete for that same budget, they need to be competitive on all fronts, and right now they are not. Their margins might be higher from obfuscating some of these key insights that might let people trim the fat, but that needs to be weighed against potential lost revenue from advertisers who can't reach profitability quickly enough and stop advertising, or lost budget share from advertisers who shift it to other channels.

I don't have numbers on those hunches to back them up of course, but it just seems like a really poor long term decision to intentionally cripple your platform in such a way (and that is inherently different than just poor design or design geared to make it easy to spend).


I'm CTO at a local newspaper chain. I ran a seminar on how to digital advertising, then ran $500 in advertising to promote the event -- all as a test to see which advertising mediums I could use to get people to show up to learn about advertising.

Here's the data and a summary:

https://docs.google.com/spreadsheets/d/1DsJYUYETwQ7a-hISFPcC...

http://www.davisenterprise.com/special-projects/how-to-waste...


I am not surprised at all. But the numbers you have posted are indicative of nothing. $500 is not statistically significant to show any results on Facebook. Most of my customers spend at least $10K for tests like these.


Paid $200+ for e-mail marketing? What does that actually mean? You bought someone's mailing list?


Or paid for an email delivery service? (such as MailChimp)


Or paid someone to create content.


I'd want to see the ad copy to believe this. The remnant inventory may have cost $2.00/$4.00 CPM but if the ad copy is highly relevant to the readers of the particular site (i.e. listen to our CTO talk about digital marketing) this is quite deceptive to draw industry wide conclusions based on this - some other readers have questioned the sample size which I agree with.


$500 is not enough or a serious test, esp if you divide it up between multiple channels.


tldr?


Fta:

"What the ROI chart says is that the return for the social ads was zero. They were a complete waste of money. They generated a lot of “action” but it was at best the wrong group of people, and at worst some type of fraud. This held true for facebook.com and its audience network. Ditto Google search ads, display ads and the Twitter campaign."


"Ditto Google search ads" checks article He spent less than $5 on Search ads... Hard to be drawing conclusions with that data set.


Nice summary, thanks for sharing!


This is some incredible data. It's really refreshing to see someone share it.


Wanna know why tech companies get such high valuations?

Look at the operating margin and net income increase in just 1 year: https://twitter.com/mbesto/status/793921076820459520

That makes investors absolutely drool.


And yet their stock is down today. =|


Powerball ticket pools make people drool, too. Companies like this are called unicorns for a reason-they don't exist (statistically speaking).


I'm curious - are you comparing Facebook, the company with nearly 5 years of success as a public company based on strategic decisions, to someone who wins a random chance lottery?


Because just like with lotteries, there are a lot of blanks, few small wins and a tiny amount of never-work-again wins: Many startups don't net the investor much, some make quite a bit after being acquired, and very few - such as facebook - turn out to be really successfull.

Your phrasing suggests that you compare Facebook (now) with lottery as a system. You should rather see Facebook as a lottery ticket that turned out to be the jackpot.


Every lottery ticket has the same odds of winning, no matter the "strategy" employed in picking numbers, location of buying the ticket, etc. Facebook is not in any way a analogue, unless you are arguing that its success was entirely random, and would have stood an equal chance of happening if I had started it at a community college, then put the headquarters in Alaska, which is false.


The difference is that I can't go and buy shares in the winning Powerball ticket.


You can: Assuming that Powerball simply collects all earnings and pays them to the winner (they don't and keep a share), simply regard your lottery ticket as your share and deposit the price you pay in your savings account.


You seem to deliberately ignoring the fact that Facebook is a publicly traded company.

You can't go up to the lottery winner and offer to buy part of their winning ticket. You can buy shares of Facebook today (in fact, at a nice discount currently).


What's not statistical about outliers?


Statistically, you will not invest in one.


I mean you may if the odds are good.


Facebook is the least transparent ecosystem. As a marketer, I find it hard to invest dollars without being able to see or understand what percent of custom audiences are exposed to ads. For example, one can upload a file (list of emails) to a custom audience, lets say 1 M big, for FB to ingest. Voila your audience is active for targeting, but how many of those emails (users) will be targeted, who knows. FB's inventory is overpriced and untraceable.


Untraceable? You should buy a print ad and try to figure out if it was worthwhile!


If the digital landscape allows for transparent reporting to measure marketing's incremental lift or ROI, then that becomes the baseline. Facebook believes its inventory (users) are a cut above the rest, thus their opaque model.

FB's advertising revenue is up 59% YOY, but that is not a clear signal growth will continue at the same clip. I foresee, digital marketers pushing back as marketing moves to a revenue generating business unit. Measurement becomes the backbone of all digital initiatives, can't measure FB as granular as display.

Yes, you can't track traditional media's impact. At least not yet. Its the reason why digital marketing overall has been growing at ~30% YoY.


Facebook provides plenty of conversion tracking features, if you can't figure out your ROI on FB advertising you're doing it wrong. There are obvious reasons why they wouldn't want to provide reports on what email addresses were marketed to (Google doesn't let you do that either...).


Figuring out cross channel attribution is far from an easy or solved problem in terms of determining ROI for a high funnel channel like this.


That's why you have coupons :)


At work we all bring our coupons, stick them in a jar and everyone can pick the ones they need. You must hate us!


They do provide you with unique reach at the adset level, which will tell you how many users in your audience have been reached.


Hey, feel free to email me at neill.silva@klaviyo.com if you'd like to talk more about targeting custom audiences. Our platform is working on tools to better segment and targets audiences in Facebook, and I'd love to get your feedback if you're interested.


How did they go from paying an effective tax rate of around 40% between Q3-14 to Q4-15 to an tax rate of 25% this quarter?

Notably, they had 2,557 MUSD in income in Q4-15 and paid 995 MUSD in taxes and this quarter they have a larger income of 3,169 MUSD but pay less in taxes, 790 MUSD. [0]

[0] https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q... - slide 22


It's a pretty meaningless number, they don't really pay that much in taxes. Their stock based compensation is artificially inflating it and that also explains the wild differences between quarters.

http://qz.com/142032/why-is-facebooks-tax-rate-so-much-highe...

> Facebook pays its staff with stock options, and thanks to a quirk of tax law, Facebook end up with large costs that can be deducted later. The company issues options to executives and records their a rough estimate of their value in its earnings report. When the options are exercised and the executives purchase the stock, it has often increased in value beyond that estimate—and the company can deduct that new, higher value, even though it didn’t cost it any real cash.


"Mobile advertising revenue represented approximately 84% of advertising revenue for the third quarter of 2016, up from approximately 78% of advertising revenue in the third quarter of 2015."

Is advertising dead on the desktop?


No one seems to have gotten it yet, but: Instagram.

You want to reach the cool kids, you must advertise on Instagram, and the only serious way to use ig is the app.


s/instagram/snapchat/gc


Not really. Instagram is way more heavily used by college kids as far as I can tell.


Instagram has ads?


Tons of them, in between posts, and they're fairly well targeted.


I manage three accounts and in the main one, I've never seen ads. Can't work out why.


3 samples I just took (which actually made me realize i get a ton of ads cause I didn't scroll very far for this):

https://i.gyazo.com/5d48e7d926ad5e237536c9dfb99d6aa1.png

https://i.gyazo.com/0194219ec43f3ce6e386f9d5b2443bc3.jpg

https://i.gyazo.com/e7904940fab2d6b610cbac5f83d119d8.png

The last one is a gif or video.


You're excluded from the audience?


Yes, users plugging products in their pictures/posts in exchange for money or free samples.


I don't think those are the "ads" people here are talking about. As far as I know Instagram doesn't make any money off of personal endorsements like that.


They offer business accounts: https://business.instagram.com/

Which looks to have at least some useful tools: https://blogs.constantcontact.com/instagram-business-account...

Now I'm not saying every Instagram model getting endorsed for posting about some company's fitness gear has a business account, but I'm also sure that number isn't zero. There's a gray area where if you're making enough money off that type of thing, or are close enough to get there with the right nudge, that it probably makes sense to buy into it even though you're not necessarily running a business.

Essentially, you're paying into being (or becoming) a professional celebrity. My guess is the number of users in that niche isn't trivial.


> Is advertising dead on the desktop?

It could mean that the only thing keeping the ad supported internet alive is the lack of AD blockers on mobile operating systems.


lack of their ubiquitous use you mean? ios added ad blockers and put the ad sector in a tizzy


iOS ad blockers only apply to webkit views. Facebook's app is not effected by ad blockers.


i will never ever install FB app or FB messenger on my cell phone anymore. Firefox with adblock, and if I can't message, well then there is SMS/Viber/Whatsapp/Hangouts/whateva.


Or is desktop traffic dead? :)


I use Facebook a lot to keep up with my family. My usage is probably 99% mobile.


Assuming users are not on both mobile and desktop, then the desktop is around 100 million (DAU less Mobile DAUs):

Daily active users (DAUs) – DAUs were 1.18 billion on average for September 2016, an increase of 17% year-over-year. Mobile DAUs – Mobile DAUs were 1.09 billion on average for September 2016, an increase of 22% year-over-year.


I don't think that's a very safe assumption.


maybe rephrase to desk top only users is around 100 million.


You don't have good ad blockers on mobile. With native apps ads are easier to show. You can download and cache them in the background.


For web? Firefox + uBlock origin works great on Android for web. Organic SERPs are actually visible.


According to [0], mobile ads are expected to surpass desktop in 2017.

On another note (related to the link I just provided), is it me or is that Google AMP service completely heinous? It seems to hide publisher content behind Google URLs and nearly force publishers to integrate to it to land in top results. Why aren't people pissed about this "takeover"? What am I missing?

[0] https://www.google.com/amp/amp.timeinc.net/fortune/2016/06/2...


Amp is amazing. Without amp it's pages full of full screen popovers that take 30 seconds to re see.


Could they have done this without making the underlying full pages/site inaccessible?


I believe it's a result of install-this-app ads being the only format that delivers measurable results.


Nah. You can only thank uncle do-not-evil-till-IPO-Google that they still block browser extensions on mobile. Resulting in no adblockers :-(


As if people would go through the trouble of opening Facebook in a mobile browser instead of just using the app.


I do walk through it, it's painless (1 extra tap on screen) and it's exactly to not have FB apps on cell phone and not have ads displayed. I use FB less, which is good for healthier life. FB long lost its glamour, it's just another RSS news feed about friends/interests.

Same for my fiancee.


More and more people (myself incl) are not using fb app. Reasons:

* all time location tracking

* inability to block ads (firefox allows to block ads on android)

* making it harder to induce compulsive fb usage (its addictive)

* battery usage (this is huge, try it)


Also you don't need to let FB get the entire gamut of permissions possible on the phone.


is this all free-to-play mobile app installs?

if so, worrisome.


Nope. And I, if I was Facebook, would not be proud of this stats. Don't put all your eggs in the same basket. Now, FB and Google has the opposite profit behavior. And I think it will be bad to both of them. Maybe they will meet in the middle, and lose their cash cow.


> Don't put all your eggs in the same basket.

This is a strange complaint. A couple years ago, Facebook was making 90% of its money on the desktop, and people were saying the same thing. Now they have (very successfully) diversified, and the complaint is still there?


I don't think it counts as diversification if you just move all your eggs to a different basket.


They added videos


If it was a problem, why would it not be now? Only because it is said that the mobile basket is bigger? It may be less deep. Google still makes a lot more than FB.


Desktop revenue is growing too. Just not at the same rate as mobile. They have not ignored their desktop platform, in fact, the ad product is still designed for creating desktop ads, while they offer lots of tips and tools for optimizing them for mobile.


So Facebook is basically killing it in mobile without building phones and phone operating systems. Google whats up with that?


It's the stream; Facebook has a stream and Google does not.

After various experiments, I think people have figured out that the #1 way to make money on mobile is to have a stream of information that people willingly spend lots of time in. You just inject ads into that stream and bingo: profit. It's much harder for Google to win big here because while they have a very useful tool, people don't linger in it. They usually use it to get in, get what they need, and get out.


>I think people have figured out that the #1 way to make money on mobile is to have a stream of information that people willingly spend lots of time in

Twitter says hi


Twitter has generally done decently well on revenue per user (although that has performed worse recently as they've reduced their sales force). Twitter's problem, more than anything else, has always been increasing active users.


That's just the plan; you still have to execute capably on that plan, which is where Twitter falls down. Honestly Twitter could be healthy company- not as profitable as Facebook, but healthy- if they didn't have such incompetent management


If this was so simple then the owners of reddit would be sitting on a gold mine.


Reddit is a pot if fights slowly being boiled by the new leadership. Just look at all the recent changes.

They now run Moat tags on the site and just added new targeting options based on interests.

The feed frequency has also increased.

The only reason they aren't doing it faster because the frogs are getting frisky.


Doh--missed my edit window.

*"Reddit is a pot of frogs slowly being boiled"


Reddit only started putting ads /in the stream/ of comments and posts pretty recently.


Do those even show up in the API?

I think you also need to close your API if you want to fully milk your streams.


Key distinction: that feed must have an algorithm controlling it's order so as to maximize the profit.


Android makes a ton of money for Google because for every Android phone, that's one more user they don't have to pay to have their default search engine be google.

Take a look at the Oracle case - Google pays billions of dollars a year to Apple to have their search on iPhones. And it's not a flat fee, it's a percentage of revenue.

Facebook doesn't have this problem because there is no other social network. Search engines don't really have network effects, facebook does.


It's fun being a free rider!


Google should start show ads on top of Facebook. If you are not paying, you are the product ;)


Plenty of companies made money on Windows without directly paying Microsoft. Google gets some revenue from Android OEMs licensing the rights to distribute Gapps. If Facebook moves Android phone sales, Google makes money. Not nearly as much as MS did per unit, but Android is also installed on way more devices today than Windows ever could have hoped to be.


Google does advertise on Facebook. There's no way for them to put AdWords or AdSense ads on Facebook without their cooperation, and if you're suggesting they do it through Android, they can have a blast trying to sell Android phones when Facebook pulls themselves from them.


And just what will those users buy? The Samsung-S7 (and equivalents) will buy a similarly priced iPhone. The rest have no alternative. BlackBerry is down and out. Windows Phone essentially is too. The only remaining players are iOS (at 10% of the market and 90% of the profit) and Android (with the rest).


That's my point. Google would never use their control of Android to serve their own AdWords or AdSense ads on Facebook on mobile, because the loss of Facebook would push the Android segment that makes them money (the higher end segment) towards iOS


Why won't you Google it.


That operating margin seems...impressive.

Well, hopefully it's not just me, but doesn't 45% seem like they're extraordinarily profitable?


There's an app on the Bloomberg terminal that allows slicing/dicing all this pretty easily. If I take the top 1,000 US listed companies by market cap and then select the top 100 operating margin from that list and bucket it by GICS... there are only 4 "Information Technology" companies higher: Visa, Verisign, Mastercard, and Check Point

In other sectors, top 20 in Financials, top 7 in Energy, top 4 in Health Care, top 8 in Real Estate are higher than FB.

edit: If you include all companies regardless of market cap, there are 15 in IT higher than FB. In all the US ~13.5k, there's ~300 higher.


Thank you for sharing this!


It's pretty good, but not unheard of. Many banks and insurance companies hover around that number.


That's not really comparable because banks and insurers require a huge amount of capital to earn those margins. For example, JP Morgan (a pretty well-run and profitable bank) made a ~32% operating margin in fiscal 2015. But JP Morgan's return on tangible equity (a measure of net profitability relative to capital used) was only ~13%. Facebook, on the other hand, had a return on tangible equity of 25% in the last quarter. And as time goes by, that return on tangible equity should increase quite a bit for Facebook, while it is highly unlikely to improve all that much for JP Morgan because of competition in the banking industry.


Visa is the only financial company I know of with that kind of margin + profit scale. They're nearly capable of 50% net income margins (and $9b in operating income on $13.8b in sales). Also like Facebook they have relatively few employees compared to their immense profit.


>And as time goes by, that return on tangible equity should increase quite a bit for Facebook, while it is highly unlikely to improve all that much for JP Morgan because of competition in the banking industry.

But Facebook is also much more likely to disappear due to competition than JP Morgan is.


I was under the impression banks are happy to get 5-10% profit margin these days, is there a distinction between operating margin and profit margin that explains that?


Yes and there's a reason for that. Profit margin is an approximative measure of how monopolistic the company. Facebook is a monopoly - because of network effects it's very hard to compete with them.


Is it really sustainable? I guess at this point that's as much a question about the future of world culture as anything. Are we going to continue feeding their machine?


They have 1.79 billion monthly actives. See any threats on the horizon? I don't. Snapchat for example is more likely to remove a chunk of Twitter's audience than harm Facebook. I can't name a single fast rising Facebook competitor, anywhere in the western world (China obviously has its own social juggernauts).

It's likely to continue to be the only social network in the west that is truly wide, spanning almost everyone. That will probably be worth $40+ billion in ad sales in two or three years.

15 years ago, who thought a search engine could scale to $80 billion in advertising? Essentially nobody. Microsoft at the time had $23 billion in sales. You would have been laughed off the planet if you forecast Google's search engine to be worth so much.


Will anyone explain why the stock is down quite a bit in extended house? The numbers look very strong to my non-finance background...


"Facebook shares declined as much as 7.8 percent Wednesday after two sobering comments on its conference call. First, Chief Financial Officer David Wehner said revenue growth rates will come down “meaningfully” next year, because the company won’t keep increasing the percentage of ads that Facebook users see in their news feed. Second, capital expenditures will rise “substantially” in 2017 as the social network works to recruit the best engineers and build data centers, he said."

https://www.bloomberg.com/news/articles/2016-11-02/facebook-...


Stock is down 1.8% at time of this comment... Did 166% net income jump not meet expectations?


It was down 1.8% at the end of regular trading today (before the earnings call). It is down an additional 6.7% currently after bouncing around a bit--the conference call is not going well!

You can see a chart of the after hours action by hitting "e" on the Google Finance chart (you may have to click on the chart first):

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...


"Facebook Reports $7 Billion Revenue, Beats Market Estimates" http://www.inc.com/associated-press/facebook-third-quarter-e...

stock down 7% after hours. WTF

edit: ah, see: https://news.ycombinator.com/item?id=12859949


I've been using Google Finance for a long time and did not know about the "e" (extended trading) feature. Thanks!


EPS of $1.09 (beat estimates by $0.12). Revenue of $7.01B (beat estimates by $90M). Currently 8.39% down in after hours trading.


This is pretty common with tech stocks. People buy on rumors and sell on news, even if the news is good. I don't get it but that seems to be the pattern.

Example: say BigTechCo will be releasing earnings reports a week from now. BigTechCo stock slowly rises in anticipation of a good report. A week later, BigTechCo announces that every possible metric is better than ever, and the outlook is even better for the next quarter/year/whatever! Analysts are pleasantly surprised, and everyone is 100% on board in believing the numbers and the rosy outlook. Within 48 hours, the stock tanks as everyone furiously sells off. It happens all the time and makes zero sense to me. I'm sure there are reasons I'm not aware of, but I've got to think it's from some sort of irrational group behavior as well.


You only have profit when you sell above what you paid for a stock. So earnings reports and these stock surges are a great time for investors to cash out. This can spark a larger sell off. I'm sure someone with more investor insight can give a better explanation but this is what I suspect.


Because they guided to slowdown in future growth. Ad load deceleration means it goes down. Investors pay for future earnings


The whole market is down, which impacts them.


I guess investors are having the same feelings people are showing here. This don't look like a healthy company, imho. Facebook mobile ads looks like scam to me, in both ends. You pay money to interact with the people you expent money and work to bring.


Both of your comments here have been composed of relatively strong opinions with nothing to back them up. Care to contribute anything to the discussion other than your potential bias?


Traditional media companies are really feeling the pain now, and it is probably going to be even worse for them when the advertisers turn even more of their money to google and facebook.


Might be interesting for Facebook to move from charging for ads to start getting their cut of successful sale. If they would crack this, there might be positive loop effect. Getting to know if users actually purchased something would give FB more data, which would allow better targeting.

Implementation of course is not trivial. One way to make this work would be for Facebook to run the platform where purchase and payment takes place, like Amazon Marketplace.


Are they including tablet numbers in mobile?


I think we've seen Facebook all-time-highs.


lol snapchat is starting to sting




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