News

Facebook posts losses in first quarterly report

Menlo Park-based social-media company Facebook posted a $157 million net loss in its debut quarterly report on Thursday, July 26.

The report details that the company's revenue increased by 32 percent from the second quarter of 2011 (April-June), up to $1.18 billion. However, in that same timeframe, Facebook's cost and expenses expanded by more than 295 percent, eclipsing the revenue gain and causing the net loss.

Much of the company's increase in expenses comes from share-based compensation expenses. During the second quarter of 2011, Facebook remained a private company and therefore did not have any share-based expenses. The now-public Facebook reported $1.3 billion in share-based compensation expenses for its second quarter in 2012.

The share-based expenses are tied to the company's Initial Public Offering in May. The IPO, which many believed would top $100 billion, failed to meet expectations with Facebook stock plummeting almost immediately upon hitting the trading floor.

Following Thursday's report, Facebook's stock fell $2.29 or 8.5 percent to close at $26.84 per share.

"Our goal is to help every person stay connected and every product they use be a great social experience," Facebook founder and CEO Mark Zuckerberg stated in the report. "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."

Advertising, which accounts for 84 percent of Facebook's revenue, was up 28 percent from 2011 at $992 million. The company also reported gains in "mobile active users" and "daily active users," up 67 percent to 543 million and 32 percent to 552 million, respectively.

— Dean McArdle

Comments

Posted by wrong, a resident of College Terrace
on Jul 26, 2012 at 7:29 pm

This article was obviously written by someone who knows nothing about the stock market.

FB stock price dropped 8.5% before the earnings report. Price dropped an additional 11% after the earnings report.

In addition to the mediocre earnings from last quarter, the real killer was a disappointing forecast for future earnings possibilities.


Posted by Sharon, a resident of Midtown
on Jul 26, 2012 at 7:46 pm



The P/E for FB is grossly inflated-future earnings growth looks abysmal.

The Face Book quarterly results are very bad-but not surprising as FB has declining advertising revenues and their business model is predicted to fail in the mid-term.

The IPO made a lot of money for insiders but the regular investor was fooled and deceived about the state of FB future earning.

FB was a fad that is going out of fashion.

Another local company with abysmal results is Tesla-

-with declining sales and revenues it lost well over $100 million in the last quarter-much worse than the same period last year.


Posted by Mark, a resident of Another Palo Alto neighborhood
on Jul 26, 2012 at 8:14 pm

I'm 30 and my friends and I are getting bored with fb. It just doesn't hold our attention anymore. I just don't need to know that you are having a latte at Starbucks or need to see 20 pictures of your new baby boy every week.


Posted by Sharon, a resident of Midtown
on Jul 26, 2012 at 9:51 pm


The issue is projected revenue growth-

-FB is a disaster in terms of its promises regarding revenue growth

However-

FB did help US intelligence to profile its users and related social network analysis we should be grateful for that-


-but that era is probably over- as

The bad guys no longer use it

FB missed the mobile market window

It will be down hill from now on


Posted by musical, a resident of Palo Verde
on Jul 26, 2012 at 10:07 pm

My high school and college alumni groups are there, but groups tend to be dominated by a few individuals that can get tiresome after awhile (sort of like right here). I sign onto FB once a week or so, to see whether anyone new has turned up. But I've never posted anything on my page, even though fewer than a dozen "friends" can view it. Still, I think the company has a future. My investment money is mostly in oil, utilities and big pharma however.


Posted by Walt, a resident of Stanford
on Jul 27, 2012 at 9:01 am

I would not think of buying this stock until it hits $15 a share.


Posted by TimH, a resident of Old Palo Alto
on Jul 27, 2012 at 11:09 am

I agree with Mark. FB is fast approaching "played" status, just like those before it. I dropped my account as the daily posts were just too boring to share and read. I give my friends and family credit for "not" trying to make their lives appear to be rich and famous, I suppose! :) Still, in the ranking of "time that you'll never get back", I think that FB has descended below television at this point. It has no depth of thought, so it was inevitable for its shallow goals to surface eventually.


Posted by Whatever happened to..., a resident of Another Palo Alto neighborhood
on Jul 27, 2012 at 11:31 am

Whatever happened to Myspace? Will that be the fate of Facebook?

Myspace leaders had the good sense to sell the company at the peak of its market value. But when going IPO, a company needs to have room for the stock price to grow.

Wait until 6 months after the IPO, when the insiders' lockups expire, and then see the stock drop like a rock. Time is a more important factor than price.

The fact is that Facebook waited too long to go IPO, botched the IPO process, and now will pay the price of those decisions. We'll see what happens when the people who joined Facebook expecting to make gobs of money will their stock options, leave for greener pastures. That's what happened over the years to Yahoo!, which will likely never again be worth what Microsoft offered to pay for it.


Posted by Phil, a resident of another community
on Jul 27, 2012 at 11:49 am

How does FB make money? I have never bought anything on the site and I've been a member for over two years. I've asked my co-workers if they had ever bought anything. All said no. Plus, they all said that there looking at the site less these adays.


Posted by Hmmm, a resident of East Palo Alto
on Jul 27, 2012 at 1:55 pm

Phil- the short answer is - they dont! The longer answer is- through ads - which doesn't seem to be working.


Posted by Anon., a resident of Crescent Park
on Jul 27, 2012 at 2:42 pm

What we need is a Wiki-Directory that people can participate in to whatever extent they want, but everyone should have some online address where people can find them, there is no threat in that or invasion of privacy.

Facebook's whole reason for being is to shove crap in front of your eyes, to get in the way of what you want to see just to the point where you do not run away. Huffington Post is the same way. You click to read a story and you are subjected to more ads that you would be if you were listening to the radio or watching TV. The ads sucking up time are what ruin AM radio as a means for informing the public - the advertising model does not work as far as educating and informing peolpe - it just brainwashes them, until they realize they have had enough.

I like FB OK, but I rarely ever log into it and I have nothing on the page, just my picture so people who want to can find me. For that, for me, it works fine. I do think it will fade away at some point because the nature of the advertising model is that they need to become more and more intrusive and invasive in order to boost earnings.

At least You-Tube lets you skip ads after 4 seconds.

There is nothing worse than clicking on a video that is supposed to be a news story, then finding out there is an ad before it, and then it auto-plays ads and stories without end, and the ads are longer than the stories.

This is intolerable. We are turning our peolpe's brains into mush!


Posted by Carlito Waysman, a resident of Old Palo Alto
on Jul 28, 2012 at 11:41 am

Who cares if FB is tanking? Mr Zuckerberg got plenty of Zuckers that made him a billionaire overnight, and we love very rich people, don't we?


Posted by Sharon, a resident of Midtown
on Aug 2, 2012 at 9:13 pm


" Facebook's share price today hit an all time low of $19.82 which values the social networking giant at almost half its May initial offering price of $38.

The company's stock dropped 88 cents on Thursday, dropping to its new low after the company posted disappointing earnings last week.

It also directly followed the revelation today there are now more than 83 million fake users on its social network.

Web Link

This dog don't hunt

We are looking at low digits and then penny stocks

Like- My Space- dead

That is it -end of story


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