Facebook (FB) Earnings: Zynga Collapse Contributes to FB Stock Woes

On Thursday, Facebook reported their first-ever quarterly earnings since they became a public company. The company was on target with predictions, with $1.18 billion of profit on 12 cents per share. However, the company still reported a loss, which came as no surprise for most people who have followed Facebook’s IPO woes. The company has had a shaky quarter, and not much is looking up for their next quarterly report either. 

Facebook has plans on how to change this though. Advertising is one of the main ways Facebook creates revenue. According to the Los Angeles Times, “Revenue from advertising totaled $992 million, which represented 84% of total revenue and a 28% increase from the same quarter last year.” Facebook hopes to increase advertising by focusing more on social ads. Social advertisements use the connection aspect of social networks to promote products. Friend recommendations and social influence fuel this kind of advertising and Zuckerberg plans to use this method to Facebook’s advantage.

There is also a lot of potential with Sponsored Stories, which COO Sheryl Sandberg explained in detail. Sandberg said, “Sponsored stories and newsfeed are the cornerstone of our mobile monetization strategy.” This form of revenue is fairly new, so there is still plenty of potential on this spectrum of their platform.

Facebook also wants to make a bigger mobile presence for themselves as well. They have launched a Facebook Camera app for iPhone, an improved version of the mobile messenger app for iOS and Android, and updated the Facebook Android app (finally!). Zuckerberg also highlighted that 543 million people are using Facebook's mobile services, and that it is used more often than the desktop service. Perhaps a continued expansion of their mobile services can change the pace of Facebook in the market.

One last blunder has been with Zynga, the social game service that has brought us wonders like Farmville. Zynga brings in about 12% of Facebook’s revenue. However, the company’s stock has fallen nearly 40% and they are blaming some of their losses on Facebook’s platform changes. The future looks bleak for Zynga. However, one solution Facebook can try is to better incorporate Zynga into their new platform so that users go back to using Farmville, Cityville, or other “ville” games by the provider.  This is by no means the end of social games, and Facebook may just need to find a new provider that will help bring them more revenue.

Facebook has notoriously been the center of attention since going public, even if the attention hasn’t been the most positive. Zuckerberg’s once growing empire has lost some of its luster since becoming public, but don’t underestimate Facebook. The tactical acquisitions and platform changes haven’t been in vain, yet. Skeptics may think that Facebook has reached its peak and is starting its inevitable fall, but Zuckerberg won’t let his empire fall that easily.

How much do you trust the information in this article?

Belinda Moreira

Belinda is a Teach for America 2013 Corp Member and 10th grade English teacher in the DC Region. She is a graduate of Georgetown University. She also has a particular interest for education policy, and is originally from Houston, TX.

MORE FROM

HBO programming president defends ‘Confederate,’ says network is “standing by” the writers

“We could’ve done a better job with the press rollout,” HBO programming president Casey Bloys admitted.

‘Game of Thrones’: These are the funniest people to follow on Twitter for live updates

A good tweet is the best antidote to scenes like Sam cutting open Mormont's greyscale sores.

Let’s overanalyze these ‘Game of Thrones’ photos from “The Queen’s Justice”

Jon Snow's going to meet his Aunt Daenerys.

‘Dunkirk’ is a Christopher Nolan movie that doesn’t need to be solved

For his new World War II epic, the puzzle-focused filmmaker decided to adjust his approach to storytelling.

Ilana Glazer and Abbi Jacobson talk ‘Broad City’ season 4 and their prayers for Hillary Clinton

"Art has just become exponentially more political since the election," Glazer said.

Jenny Slate’s raw, honest exploration of female sexuality is the most riveting part of ‘Landline’

Gillian Robespierre and Elisabeth Holm's new film lets its women characters express their sexual desires on their own terms.

HBO programming president defends ‘Confederate,’ says network is “standing by” the writers

“We could’ve done a better job with the press rollout,” HBO programming president Casey Bloys admitted.

‘Game of Thrones’: These are the funniest people to follow on Twitter for live updates

A good tweet is the best antidote to scenes like Sam cutting open Mormont's greyscale sores.

Let’s overanalyze these ‘Game of Thrones’ photos from “The Queen’s Justice”

Jon Snow's going to meet his Aunt Daenerys.

‘Dunkirk’ is a Christopher Nolan movie that doesn’t need to be solved

For his new World War II epic, the puzzle-focused filmmaker decided to adjust his approach to storytelling.

Ilana Glazer and Abbi Jacobson talk ‘Broad City’ season 4 and their prayers for Hillary Clinton

"Art has just become exponentially more political since the election," Glazer said.

Jenny Slate’s raw, honest exploration of female sexuality is the most riveting part of ‘Landline’

Gillian Robespierre and Elisabeth Holm's new film lets its women characters express their sexual desires on their own terms.