Facebook first public results – don’t be a Grinch

Late last night – in fact while I was merrily consuming some nice wine in the garden bar at The Sanderson, Facebook’s first set of public results were published.

It’s really not a bad effort despite what many in the press are focussing on.

The high level picture is that revenue is up, hitting 1.18 billion dollars. That is a business success, whichever way you cut it.

 There will be many Facebook ‘Grinches’ that linger on the two key negatives (margin down from 53% to 43% and that costs and expenses up by almost 300%) but their schadenfreude would be entirely misplaced. Margin will for the moment be trickier because there is less space on mobile to view ads.  Costs and expenses are obviously up because of payments arising out of employee share schemes and the IPO.

 I see the results very positively and in the context of the Internet market as a whole.  Everyone is using Facebook, everyone is going mobile in terms of how they connect with their friends and how they consume information and content.  Facebook has become a utility in our daily lives and now it’s really about how Facebook executes on that.

 The results reveal some positive data that Facebook is heading in the right direction, in particular there are impressive statistics on return on investment in advertising, which 49% of audited campaigns returning 5 x spend.  This is impressive. Alongside that Facebook continues to innovate for users, for example, purchasing Instagram, launching Facebook Exchange – all steps towards success and growth.

 So, the upshot of Facebook’s first set of public results is this.  Like!



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