Facebook’s revenue hit $5.4 billion in Q1 2016, up by 52 per cent year-on-year, which, just like last quarter, was mainly as a result of ad revenue ($5.2 billion), while net income tripled to $1.5 billion, up from $512 million a year ago.
The company’s board has proposed to create a new class of non-voting shares to “create a capital structure that will, among other things, allow us to remain focused on Mr Zuckerberg’s long-term vision for our company” and encourage him to remain “in an active leadership role”.
Google made a similar move back in 2014. The new Class C shares would have the same economic rights as other shares but no voting rights.
According to the CEO, he wants to “keep founder control of Facebook” and maintain the voting structure “that has served us well” so he can continue to fund the Chan Zuckerberg Initiative, announced last year with his wife Priscilla Chan, through which he will give 99 per cent of his Facebook shares “to advance human potential and promote equality”.
The reclassification depends on approval by a majority of outstanding votes held by company stockholders, and a vote is expected to be held at an annual meeting on 20 June.
Ad revenue
Advertising revenue grew by 57 per cent to $5.2 billion, of which $4.2 billion came from mobile ad revenue, up 75 per cent year over year.
Mobile ad revenue is now approximately 82 per cent of total ad revenue (up from 73 per cent in Q1 2015), “driven by strength from Facebook’s news feed”. Facebook launched ‘Reactions’ this quarter, to encourage users to interact more with their news feed.
Facebook has more than 3 million active advertisers on Facebook and over 200,000 on Instagram.
It claims to have expanded measurement capabilities so more businesses can see the results they get from ads and made it easier for small and medium businesses to use the same targeting tools and ad formats that its larger advertisers use.
Meanwhile, over 1.5 billion people accessed Facebook via mobile devices in March, up 21 per cent from last year.
“In recent weeks, we’re also consistently seeing more than 1 billion people using Facebook on mobile every day,” commented Zuckerberg.
1.65 billion people now use Facebook every month and 1.09 billion people use Facebook every day, the latter being up 16 per cent compared to last year. 989 million people used the social network daily via a mobile device in March, up 24 per cent from last year.
Users around the world spend on average more than 50 minutes a day using Facebook, Instagram, and Messenger, “and that doesn’t even include WhatsApp”, the CEO said.
“Over the next three years, we’re going to keep investing in our most developed ecosystem, the Facebook app and platform,” he added.
However, Facebook is still concerned that users are becoming passive and wants to encourage them to create and share more content. Earlier this week, it was reported to be working on a camera app for this purpose.
Live video is also part of these efforts, which was launched this quarter. “We’re at the beginning of a golden age of online video. Live is just one part of our overall video effort, but we think it has a lot of potential,” said Zuckerberg.
The company also said it is building an open source telco infrastructure project called TIP for its internet.org initiative, to make it cheaper to operate mobile networks. Meanwhile Free Basics now features more than 600 services.
VR
In Q1, Facebook started shipping Oculus Rift.
“We’ve got a lot of great content, with more than 50 games and apps built for Rift,” said Zuckerberg, adding that “this is very early, and we don’t expect VR to take off as a mainstream success right away… But eventually, we believe that VR is going to be the next big computing platform, and we’re making the investments necessary to lead the way there.”
The company said there are now hundreds of apps built specifically for Samsung’s Gear VR headset and people have watched more than 2 million hours of video on it.
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