Facebook posts $157m loss for Q2 2012
Stocks down as analysts question Facebook's ability to get advertising to mobile users
Shares in Facebook have dropped 11%, after the company posted a quarterly loss of $157m.
In its Q2 2012 results, the social networking company said that revenues rose 32% to $1.18bn, but profits were down from $240m in the same quarter last year. Excluding staff share schemes, Facebook would have made a profit of $295m.
"Our goal is to help every person stay connected and every product they use be a great social experience," said Mark Zuckerberg, Facebook founder and CEO. "That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."
Facebook did not provide any financial forecasts going forward, and analysts were concerned over the company's lack of ability to capitalise on mobile users.
The social network's monthly active users (MAUs) rose 29% from the same period last year to 955 million, and mobile daily active users surged 67% year-on-year to 543 million, but as more users switch to accessing the site via mobile, Facebook is less able to reach them with advertising, and so it is making less per user.
Mark Zuckerberg, Facebook founder and CEO partially acknowledged the mobile issue in a company statement.
"Our goal is to help every person stay connected and every product they use be a great social experience. That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends," he said.
Independent digital marketing agency Greenlight suggested that Facebook should be taking steps to develop its own phone.
"If a Facebook phone is now not on the cards, Facebook remains without a solid answer to its mobile problem, said Andreas Pouros, COO at Greenlight. "Yes, new ad formats have been and will continue to be launched by the company for mobile users, but there is a serious question over whether Facebook can integrate a compelling advertising offering on the smallest of screens which users will be comfortable with and that does not interfere with their Facebook user experience. Suffice to say, yesterday's earnings call shows Facebook to be a great company that can make lots of money, but in the mobile battle, Google and Apple remain far ahead of the pack.
"The earnings call provided little confidence that Facebook has made any significant inroads into this problem, and many investors commented that they would have liked a more elaborate plan and forecast to alleviate their concerns over future profit growth," Pouros added.