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24 October 2012

Five questions answered on Facebook’s third quarter losses

Company reports $59 million loss.

By Heidi Vella

The internet’s biggest social networking site is still in the red, even after third quarter profit rises. We answer five questions on Facebook’s third quarter figures.

What profits and losses is Facebook reporting?

Facebook has reported a loss of $59 million, despite profits exceeding expectations in the third quarter and rising by 32 per cent to $1.26bn, between July and September.                                    

How can Facebook be reporting a loss and a profit rise?

This is because in the last quarter Facebook lost $157m.

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What about Facebook’s shares?

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Facebook’s shares are also down by 50 per cent since they first floated on the stock market in May.

There is a lot more advertising on Facebook nowadays – has their revenue from advertising risen?

Yes. In fact, revenues from advertisements rose by 36 per cent from July to September compared to the same period last month. Advertising revenues stood at $1.09 billion, up from 28 percent growth in the second quarter.

Where is Facebook going to focus on gaining new revenue from in the future?

Facebook sees its future in mobile phones. 604 million of its 1.01bn users access the social networking site on their mobile phone. Mobile phone advertising makes up 14 per cent of its sales, bringing in $152.6m.

Chief Executive Mark Zuckerberg said in a statement:

“People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform.”