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Five things you should know about Facebook's new figures

As Facebook released its fourth quarter earning report, investors were expecting strong figures -...
Newstalk
Newstalk

11.13 29 Jan 2015


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Five things you should know ab...

Five things you should know about Facebook's new figures

Newstalk
Newstalk

11.13 29 Jan 2015


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As Facebook released its fourth quarter earning report, investors were expecting strong figures - and they got them. But the thing that everyone was really interested in was the future of video on the site...

1. Three billion a day

There are two things happening in media/social media, mobile and online video, and 2014 saw Facebook pushing resources into video content. And according to last night's report, it's working.

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If you are a frequent user of the site you have probably noticed more and more auto-playing video content popping up in your news feed.

By last summer Facebook said that it was passing one billion views a day, and by the end of the year it reported that this number had jumped to three billion.

It is important to point out that this is just video uploaded to Facebook - it does not include content shared from sites like YouTube and Vimeo.

Facebook's own blog uses Barack Obama's recent State of the Union address to highlight the platform's video reach.

11 second Taylor Swift video clocks almost 9.5m views

2. It's time to monetise video

The stats suggest that Facebook is on the right track with video - the question is how should it use this audience to start making money?

The Financial Times says that video advertising could be worth as much as $1bn (€900m) to Facebook in 2015. The site is already experimenting with these adverts, but it is taking its time to prove that video works on the site first.

Its pitch to advertisers is that it can sell highly targeted video advertising slots that are more effective than costly TV campaigns.

3. Original content

While companies like news organisations and record companies have gotten on-board with Facebook video, there is also a growing audience for user-made original videos.

In 2014 the number of videos posted by individual users increased by 75 percent globally - and 94 percent in the US. The company now reports that more individual videos are being uploaded than photos.

Facebook might tweak its aggregating algorithms to highlight this original content in an attempt to drive traffic away from competitors like YouTube.

4. Managing the shift to mobile

As mobile usage has ballooned - competitors like Twitter have struggled to deal with this transition, but Facebook's core site and app have continued to perform well.

Mobile advertising made up 69 percent of Facebook's ad revenue in the fourth quarter - coming in at $2.48bn (€2.2bn). 86 percent of its users now access the network from smart devices.

It has countered a potential slow-down as users go mobile by buying up competitors like WhatsApp and Instagram.

The Instagram purchase in particular was a savvy move; it bought the filtered photo-sharing app for $2bn (€1.8bn) in 2012. By the end of 2014 it was valued at $35bn (€35bn) - and had more active users than Twitter.

5. The cost of success

While the company has reported a 49 percent increase in revenues, this has been countered by an aggressive 87 percent growth in spending.

This was made up of increases in salary payments - particularly the added cost of paying staff in acquired companies - and research and development costs. Time will tell what exactly it is that they have been researching and developing.


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