Facebook's Q3 profit 'set to hit S$347m'
2012-10-22 18:08:11
Facebook will face pressure from its investors this week on how it will speed up revenue growth as the company tries to reverse a 50-per-cent slump in its share price since it floated, the Daily Telegraph reported.
Although the world's largest social networking site now has 1 billion users - a milestone it reached earlier this month - concern remains over the pace at which it can convert that growth into advertising sales.
"All investors are going to care about is the tone and tenor of revenue growth," said Mr Brian Wieser, an analyst at Pivotal Research Group.
Third-quarter revenues are expected to have risen by 29 per cent to US$1.23 billion (S$1.5 billion) when the company delivers results tomorrow, according to analysts.
That is down from a 32-per-cent rate that Facebook achieved in the second quarter.
The company also is forecast to report a quarterly profit of US$284 million compared with a loss of US$157 million in the second quarter, when it took a charge relating to share options awarded to its employees.
The anxiety over the pace of revenue growth has deepened because Facebook's fastest expansion is in users accessing the site on mobile devices, which command lower advertising rates.
The challenge presented by mobile, which accounts for 600 million of Facebook's users, was underlined last week when Google shocked Wall Street with much lower profits than forecast.
Analysts blamed the growing numbers who access the search engine on mobile devices.
Mr Mark Zuckerberg, Facebook's co-founder and Chief Executive, and Ms Sheryl Sandberg, the company's Chief Operating Officer, are stepping up their efforts to convince advertisers that they can target customers more easily on Facebook than other platforms.
Over the past few months, the company has launched Facebook Exchange, which allows companies who track customers browsing their own sites to ask Facebook to serve up adverts for their products on that person's Facebook page.
Facebook has struggled to win investors' backing since its US$104-billion flotation in May.