Facebook’s stock jumped by 15.5 percent, or $35.3 billion, after the company announced it now has over 1 billion daily users on average, and control half of all social media accounts on the planet.
Of the 7.2 billion global inhabitants, almost one in four logs into Facebook each month, and one in seven logs in every day, according to Digital Statshot.
Facebook’s daily-average-user base in the last three months of 2015 grew by 148 million, and its monthly-average-users base grew by 200 million. Key to the growth of profitability, 87 percent of Facebook’s 1.6 billion users accessed the app on mobile devices.
Surging social dominance has helped Facebook generate profits that beat Wall Street analysts’ estimates by at least 20 percent for the last three quarters. In the most recent quarter versus the same quarter last year, advertising revenues spiked by 52 percent, to $5.6 billion. Profits grew an even faster to $1.56 billion–a 57 percent gain versus the same quarter last year.
A year ago, there were huge concerns that leading social media companies might not translate the promise of connected communities to a return on investment for their corporate customers. In a symbolic move, General Motors famously pulled its entire $10 million+ Facebook advertising budget because it couldn’t measure how their sales would directly benefit from a social media presence.
In an Oracle-funded study published in January of 2015, Forrester Research quantified that the best return from a social media competitor came from Facebook, where $1 of advertising generated $4.52 in sales. But with few corporations having a profit margin over 10 percent, that meant every $1 of Facebook spending resulted in at least a $0.60 loss.
Advertising on Twitter generated less than half of Facebooks sales. That meant that advertising on Twitter generated an even larger loss of about $0.80 for every dollar spent.
No one was surprised when Breitbart News on January 26 reported that Twitter’s monthly-average-users had flat-lined, or that the company imploded from the #3 social media darling to the #8 goat, half the senior management had just left, the company is about to book a $500 million loss for 2015, and shareholders are down 55 percent.
But Facebook’s turnaround has been a thankful surprise to the industry and a thrill ride for investors, who are up 40 percent. The difference is that the breadth of Facebook’s massive user base presents inbound marketing opportunities for corporations to attract customers by promoting their brand through the full spectrum of blogs, podcasts, video, eBooks, e-newsletters, whitepapers, SEO, physical products and other forms of content.
CEO Mark Zuckerberg commented on the fabulous results that Facebook is “working to bring connectivity to billions of people who’re not yet connected, and building new technologies that give people more ways to express themselves.”
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