Mark Zuckerberg, founder and chief executive officer of Facebook Inc. tried to shore up confidence in the conference call following his company's first earnings report.
Facebook's first earnings report was disappointing, but it merely reflected its history of the last three months.
The social network lost 18 percent of its value Thursday, with its poor showing only growing poorer because of plummeting Zynga earnings, according to the New York Times. Zynga is the social game company that makes up the lion's share of Facebook games. Facebook stock dropped to less than $24 in after-hours trading, the lowest price since its initial public offering in May.
However, co-founder and chief executive Mark Zuckerberg remained optimistic about the company's growth. It's true that revenue was up 32 percent, more than predictions, but Facebook's profits failed to reassure investors. “With the unprecedented hype around the company’s I.P.O., some investors believe more upside would have materialized — higher revenues, higher earnings,” Jordan Rohan, an analyst at Stifel Nicolaus, told the New York Times.
Zuckerberg and his executives emphasized its mobile efforts including advertising, and said 543 million people used Facebook on mobile devices by the end of June, a 67 percent jump from last year, according to the Times.
The company said its revenue for the quarter climbed to $1.18 billion, from $895 million; most of it came from advertising. The company reported a net loss of $157 million, or 8 cents a share, compared with net income of $240 million, or 11 cents a share for the same quarter last year. Much of that was because of stock compensation, and on an adjusted basis, the company posted a profit of 12 cents a share, or $295 million, meeting analysts’ expectations.
In the end, most analysts worried that users will tire of Facebook or have "Facebook fatigue," which is a possibility. However, because of its intense penetration into almost all parts of the world, Facebook has to focus on profits rather than the number of users it has. That's where Facebook will have to get creative and use advertisements that won't drive away its millions of customers..