November 4, 2015 Last Updated 4:00 pm

Facebook revenue grows 41%, heavy investments lead to more moderate earnings growth

Financial Times report that Facebook is set to launch another new news app, this one called Notify; new app comes only weeks after Facebook integrated Instant Articles into its main iPhone app

The social network rather easily beat analyst forecasts with its Q3 earnings report, reporting that revenue news 41 percent in the quarter. Huge gains in expenses, investments really, meant that income grew a more modest percentage.

Facebook-users-bRevenue for Facebook hit $4.5 billion in Q3, versus $3.2 billion in the same quarter last year.

Meanwhile, the Financial Times reported today that Facebook will be launching another news app called Notify. I am completely baffled why any of the major news organizations would play along this time, though. Facebook recently added Instant Articles to its main Facebook app, and seems to me that this was the perfect solution for media – being right within the main app. A new app has zero users at launch, and though the Facebook name is good for thousands of downloads, will Facebook users suddenly decide not to use the main Facebook app and use Notify instead? Sounds like another media ghetto, like Apple News.

Facebook-rev-geoBut we’ll see soon enough. One thing Facebook has proved is that it can design good apps and good media designs. Its Paper app wasn’t a runaway hit, but its design and features were what Instant Articles was built off of and so the effort did lead to some positive things. Just not a successful Paper app.

One thing media execs need to remember, the social networks are just as capable of fragmenting the market as media companies are. The key, it seems to me, is to work with those companies that want to bake the news right into their systems. Make news part of iOS 10 and I’m an enthusiastic proponent of it. Launch just another app, and… yawn, I’m just not buying it. Why work all day building someone else’s new brand, when their main brand seems what you want to take advantage of.

Here is Facebook’s Q3 earnings statement, and the answer to the question ‘where did all that digital ad revenue go?’:

MENLO PARK, Calif. — November 4, 2015 — Facebook, Inc. today reported financial results for the quarter ended September 30, 2015.

“We had a good quarter and got a lot done,” said Mark Zuckerberg, Facebook founder and CEO. “We’re focused on innovating and investing for the long term to serve our community and connect the entire world.”


* Non-GAAP financial measures exclude amortization of intangible assets, share-based compensation and related payroll tax expenses. Non-GAAP net income and EPS also exclude the income tax effects of these non-GAAP adjustments. See the table below titled “Reconciliation of Non-GAAP Results to Nearest GAAP Measures.”

Third Quarter 2015 Operational Highlights

  • Daily active users (DAUs) – DAUs were 1.01 billion on average for September 2015, an increase of 17% year-over-year.
  • Mobile DAUs – Mobile DAUs were 894 million on average for September 2015, an increase of 27% year-over-year.
  • Monthly active users (MAUs) – MAUs were 1.55 billion as of September 30, 2015, an increase of 14% year-over-year.
  • Mobile MAUs – Mobile MAUs were 1.39 billion as of September 30, 2015, an increase of 23% year-over-year.

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