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Facebook reports revenues up 40% but Wall Street says 'meh'

Mobile money up but margins are falling

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Mark Zuckerberg must be tearing at his hoodie after Facebook's shares dipped following the release of what are, on the face of it, very respectable quarterly results for his company.

Revenues for Facebook's fourth quarter of fiscal 2012 stand at $1.585bn, up 40 per cent on this time last year, with advertising up 41 per cent and covering 84 per cent of Facebook's incoming cash-flow. Meanwhile, the social network has 618 million daily users, an increase of 28 per cent on the year, and 1.06 billion monthly users, up a quarter over the same period.

In case you're wondering what you're worth to Facebook, the average revenue per user was $5.32 worldwide. The average US and Canadian Facebooker – who makes up the bulk of Facebook's revenues – is worth $13.58 to Zuckerberg's firm, while the figure drops to $5.91 in Europe and just $2.35 in Asia.

Mobile use of Facebook, which the company is relying on for future profitability, was also up on year. Revenues from mobile advertising now account for around 23 per cent of the quarterly total, up from 14 per cent this time last year. Facebook recently announced a new Android app aimed at increasing this further.

"In 2012, we connected over a billion people and became a mobile company," said Zuckerberg in the earnings statement. "We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company."

But the quarterly income reports weren't so good. Facebook generated just $64m in income last quarter, down from $302m during the same quarter last year. At the same time, expenses rose 82 per cent on the year (the company added over 1,200 staff) and margins fell from 48 to 33 per cent over the year.

Wall Street was unimpressed, and the stock price fell slightly after the report was released. While Facebook's share price has been rallying of late, it's still only at two thirds of what IPO buyers paid and there are a lot of people wondering how long they are going to have to wait before they can make their money back. ®

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