Facebook reports 138% jump in second quarter profits

Facebook has reported second quarter profits of $791m, an increase of 138% compared with the same period a year ago, and revenues of $2.9bn, an increase of 60%.

Revenue from advertising, which makes up most of Facebook's income, was $2.68bn, up 67% compared with the second quarter of 2013.

Mobile advertising revenue represented about 62% of advertising revenue for the quarter, up from around 41% of advertising revenue same period a year ago.

The positive figures were tempered by an increase in costs, with expenses reported at $1.52bn in the second quarter, up 22% from 2013.

"We had a good second quarter," said Facebook founder and chief executive, Mark Zuckerberg, in a statement.

"Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world," he said.

According to research firm eMarketer, Facebook accounted for 5.8% of worldwide digital advertising revenues in 2013 and is expected to reach 8% by the end of 2014, reports The Guardian.

Digital advertising spending globally increased 14.8% to $120.1bn in 2013 and is expected to grow another 16.7% this year to reach $140.2bn.

Facebook said it now has 1.32 billion active users every month, up 14% on 2014, with more than a billion of those users on mobile devices.

Like Yahoo and other internet-based firms, Facebook is investing in its appeal to mobile users to grow membership and boost income from mobile advertising.

In February 2014, Facebook acquired messaging service WhatsApp in a deal worth $19bn in cash and shares.

Analysts said the acquisition is consistent with Facebook’s aims to dominate in mobile apps, messaging apps and emerging countries.

In March, Facebook announced a $2bn deal to acquire virtual reality developer startup Oculus VR.

At the time, Zuckerberg said: "Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow. Oculus' technologies could "change the way we work, play and communicate”.

Facebook said it planned to expand the use of Oculus technologies to include “communications, media and entertainment, education and other areas".

During a results conference call with analysts, Zuckerberg said people in the US spend nine hours a day on digital media, but less than an hour on Facebook.

“One thing that is exciting is there is still so much room to grow,” he said.

Forrester research analyst Melissa Parrish said the results were impressive, but it will be interesting to see how Facebook will differentiate itself from other advertisers, she told The Guardian.

Mobile advertising is currently mainly aimed at getting people to download apps, but there are only so many apps people will want to download, she said.

Parrish said Facebook is one of the few companies able to take mobile advertising to the next level, which she said consisted of “deeply integrated, highly personalised, content-based ad products”.