Facebook stock price hurting with fewer teen users? Probably not for long
Facebook blew the barn doors of its latest quarterly results, sending the stock price surging in after-hours trading Wednesday after the numbers were released.
The company posted quarterly earnings of $425-million. Revenue was up $1.8-billion. Profit margins are up to 37 per cent. And most of all that growth was from mobile.
Plus, there are more than 800 million active users on the network.
Traders responded well, initially, as FB soared more than 14 per cent in after-hours trading.
But then, they digested a little more of the social network’s quarterly report, and were less impressed. The stock price dipped in after-hours trading by 3 per cent.
Why? A small caveat that Facebook now faces – fewer younger users are active on Facebook.
One analyst told the Globe that they may be on Twitter, and these young teens could be seeing Facebook as the ghost of MySpace (shudder).
Instead, these teens are spending their time on Instagram and Snapchat.
But what many people don’t realize – even some analysts seem to be forgetting this – but Facebook owns Instagram.
Oh, and Instagram hasn’t even been monetized yet, despite Facebook’s purchase of the photo-heavy social network for $1 billion.
So while teens are turning to Instragram feeds over Facebook feeds, there are no ads in Instagram to make Zuckerberg & Co. any money – yet.
It’s no secret that advertising is coming to Instagram next year, and Instagram is as mobile-dependent as water is critical to the survival of fish.
With this in mind, it seems as though mobile advertising revenue has the potential to pick up even more steam for Facebook.
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