Posted May 1, 2013 7:06 pm by with 1 comment

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facebook homeMark Zuckerberg delivered the Facebook:  State of the Company address today and from where he’s sitting, it’s all looking good. Profits are up. Revenue for the first quarter totaled $1.46 billion, an increase of 38%, compared with $1.06 billion in the first quarter of 2012.

Users are up:

  • Daily active users (DAUs) were 665 million on average for March 2013, an increase of 26% year-over-year.
  • Monthly active users (MAUs) were 1.11 billion as of March 31, 2013, an increase of 23% year-over-year.

All of that flies in the face of recent reports that Facebook has lost its sparkle along with a large portion of its members.

Advertising revenue is up:

“$1.25 billion, representing 85% of total revenue and a 43% increase from the same quarter last year.”

Want to know what’s really working? Mobile!

751 million people logged in via mobile as of March 31, 2013, an increase of 54% year-over-year and mobile advertising is now bringing in 30% of the ad revenue.

Sounds good, doesn’t it?

What’s bothering analysts are the large expenditures. Facebook’s first quarter 2013 expenses were up 60% as compared to the first quarter of 2012. According to Forbes, Facebook’s heavy investment into new infrastructures and additional staff forces the company to show a lower profit than expected. I say, profit is profit – at least they didn’t lose money, right?

A lot of Facebook’s resources went into creating mobile products such as Facebook Home. They also invested in a newsfeed redesign, both of which where done to keep Facebook users on the page for longer periods of time.

Here’s the downside of Facebook’s mobile success: lower average revenue per user


Presumably the drop is coming from the fact that there are fewer ads on mobile, so the rise in mobile only users is actually taking a bite out of the potential ad revenue. Kind of a double-edged sword, isn’t it? You need mobile to succeed, but mobile success is cutting into your revenue.

Though mobile and advertising are slowly coming together for Facebook, there’s one step they’re not about to take – there will be no ads on Instagram for the foreseeable future. Hear that? It’s the sound of 100 million monthly users breathing a sigh of relief.

Finally, let’s look at a breakdown of daily users:


Here in the US, users have nearly flatlined. The real growth is happening outside of North America. But how much more of the international audience is still likely to come on board? Then what? Until we discover life on another planet, Facebook is about to max out. So maybe those naysayers weren’t so far off after all.

What do you think of Facebook’s State of the Company? Are they in good shape or are they just making it seem that way with lots of numbers and pretty slides?