Facebook's Revenue up on Last Year and down on Last Quarter


It's an unexpected combination of ups and downs for Facebook as they filed their updated S-1 documents today. Their IPO is still upcoming, but the documents they're releasing ahead of same are showing a side of Facebook many had never expected to see.

Basically, the news is quite good for Facebook over last year, with revenues up 45 percent over the previous year. But where things get a bit unusual is in the discovery that Facebook's revenues have fallen fully six percent from just last quarter.

Facebook pinned the blame for the drop in revenues on rising costs, and that's a perfectly logical thing to blame. Anyone who's been to the grocery store lately knows things aren't cheaper now than they were this time last year. But what's got some investors concerned is that the decline in earnings is so pronounced and over such a short term. It's a case of five steps forward, and one step back; it's one thing for a business' growth to slow. In a bad economy like this one, it's almost expected. But for a company whose numbers have climbed so far so fast to start seeing negative growth can be unnerving.

Facebook, however, was being downright rational about the whole thing, expressing the belief that, indeed, their user growth and revenue growth would decline over time. Pointing to past history, Facebook noted that their revenue had climbed 154 percent between 2009 and 2010, 88 percent from 2010 to 2011, and now, the 45 percent number we've seen for the 2011 to 2012 corridor. Basically, the more people that join Facebook, the fewer people there are to join Facebook in the future.

With Facebook making more hiring -- full-time employees went up 46 percent over the course of the last year -- and costs in the market going up, some slowing in revenue growth will simply be part of the normal operations. Facebook isn't taking this lightly, though, with the recent purchase of Instagram and the purchase of several patents from Microsoft. It's clear Facebook has its eyes on the future, and development -- and the associated costs therein -- will be part and parcel of that future for some time to come.

Edited by Rich Steeves

Contributing TechZone360 Writer

Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More