Facebook squashes rumours regarding smartphone development

Although Facebook’s US$1.18 billion in revenue for Q2 was slightly ahead of Wall Street expectations and up 32 per cent year-on-year, the company swung to a US$157 million net loss – and gave little guidance on future prospects. 

The number of Facebook’s so-called monthly active users (MAUs) hit 955 million at the end of the period, up 29 per cent year-on-year, while 543 million of these now access the service via mobile devices, a 67 per cent rise.

CEO Mark Zuckerberg said Facebook was “focused on investing in our priorities of mobile, platform and social ads.” On the subject of mobile, Zuckerberg appeared to shoot down long-running rumours about a Facebook smartphone. During a conference call he described "building out a whole phone" as something that "wouldn’t make much sense for us to do."

Revenue from ads was up 28 per cent to US$992 million, representing 84 per cent of total revenue, but mobile advertising has only recently been introduced and it is likely to only account for a tiny fraction of sales. Many analysts questioned why Facebook has to date been unable to monetise its sizable mobile presence.

Payments and “other fees” accounted for the remaining US$192 million.

The net loss was mainly due to charges related to Facebook’s ill-fated IPO in May. Shares were priced at US$38 at launch but sunk below US$25 on July 26 for the first time.