Facebook Inc (NASDAQ:FB), the No.1 social media company, on Thursday announced achieving a landmark of 1 billion users last month.
A lot of hurdles were faced by Facebook since its initial public offering. There were sharp chances of growth in revenue to slowdown and as how do Facebook make money from users accessing its site on mobile devices, by the investors and analyst.
Facebook based in Menlo Park, California, achieved the 1 billion milestones on September 14 at 12:45 p.m. Pacific time an up by 45 million users since June. It had 955 million active monthly users than.
According to a Factsheet, the company reported of 600 million mobile users.
On being asked by NBC’s “Today” co-anchor Matt Lauer, about the company using 1 billion users and making money by "killing it,", the Chief Executive Mark Zuckerberg replied "I think it depends on your definition of 'killing it.' I mean we are making billions of dollars."
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Facebook posted an increase by 32 percent to $1.18 billion for the second quarter as per the earnings report. Roughly 84 percent of the total revenue in the second quarter was accounted by advertisement.
"There's 5 billion people in the world who have phones, so we should be able to serve many more people and grow the user base there," said the 28 year old CEO.
In pursuing its growth through mobile devices, the CEO said that the company's new mobile ads were delivering better results for advertisers than its traditional ads on personal computers.
To increase its growth, Facebook has taken initiatives including a new advertising platform and measurement methods to show companies they are getting their money's worth with Facebook ads.
No surprises for the analyst were there because as expected Facebook reached its goal. Wall Street had expected Facebook to hit 1 billion in the third quarter, said Dan Ernst, Hudson Square analyst. But the key according to the analyst was how to make money from its users.
The top five user companies for Facebook are Brazil, India, Indonesia, Mexico and the United States.
Facebook has been taking interest in offering new products, to generate revenue, as per the fatal believes of investors and analyst to make money. In recent quarters there was a sharp decline in revenue growth rate.
One of such initiative was launching of new website “Gifts” for its user, where they can buy, send gifts to friends.
Facebook faced a downfall of more than 40 percent since its opening at $38.
On Thursday, Facebook shares rose 0.6 percent to $21.97.
Meanwhile, The Los Gatos, California-based company Netflix, Inc.(NASDAQ:NFLX) stock extended its uptrend and rose another 6.50% in Thursday’s session after soaring 12% in the previous trading session.
The rise was the best in almost three months, which was followed because of the review of a Citigroup Inc. analyst stating the improvement of video- subscription service to its customers.
Engaged with customer satisfaction issues, since 2011, with increase in prices for users who both stream videos and get DVDs by mail and an attempt that year to separate those offerings was Netflix.
Compared to a 45 percent satisfaction with customers in first and second quarter, a Citigroup survey last month found satisfactory 48 percent customers who are “very or extremely satisfied.”
A Citigroup analyst Mark Mahaney, wrote “Netflix’s competitive position continues to rise.” “The percentage of respondents listing Netflix as a top destination has increased” from 25 percent in the second quarter to 35 percent now.
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Mahaney wrote: “The perceived streaming content selection appears to have improved,” in the past 12 months about thirty seven percent believe it has got bettered, while 16 percent says it has worsen.
He rated the shares buy/high risk.
Citigroup survey included about 3,800 U.S. Internet users, including more than 1,200 current and 700 past Netflix subscribers.
Netflix shares are under pressure of competition which might hamper its growth.