Facebook reports disappointing results

Published:  27 Jul at 9 AM

Shareholder payments have resulted in Facebook declaring a $157 million loss. The results are the first to be released by the social networking giant since it listed on the stock market in May. Expenses and costs for the three month to June rose to $1.93 billion, an increase of 295 per cent on a year earlier.

If staff share schemes had been taken out of the equation the company would have published profits of $295 million. The loss saw shares in Facebook hit $23.94, a drop of 11 per cent and the lowest they have ever been. In May, Face book shares were being sold for $38 each.

Sales in the second quarter rose 32 per cent to $1.18 billion and monthly active user numbers were up 29 per cent compared to the same period in 2011.

The number of users has now apparently hit 955 million. However, some have questioned this figure because of the growth of fake profiles on the network.

Facebook is currently faced with the exodus of its users from the computer screen to mobile devices. It is more difficult to generate advertising revenue on a phone and analysts are worried that until the social network sorts this out its stock will continue to suffer.