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Michael McLellan

How Does Facebook Maintain Its Staggering Growth?

by Michael McLellan | Dun & Bradstreet Editor

May 11, 2016 | No Comments »

No wonder the powers that be recently added a “love” option for Facebook users — the good news just keeps coming in for the social media behemoth. The company’s stock price has spiked in the past two weeks on the strength of better-than-expected quarterly earnings and sales figures.

Staggering Growth

Facebook has experienced exponential growth over the past few years, enabling it to dominate the social networking world as the most-trafficked site of its kind. The company reported revenue of $17.9 billion for fiscal 2015. That was an increase of $5.4 billion (or 44%) compared to its revenue in fiscal 2014, which was about $12.5 billion.

Its net income was $3.6 billion in fiscal 2015. That was an increase of $748 million (or 25%) compared to the company’s net income the previous fiscal year.

Facebook owes the bulk of its growth to its ability to lure more and more visitors to its site and keep them engaged. The site then stores data about its users and sells that info to advertisers and marketers. The growth in Facebook’s advertising business, driven by mobile ads customized for individuals, has been staggering.

Mobile Ad Gold

Advertising is Facebook’s bread and butter. Facebook earned 95% of its revenue from the sale of advertising (more than $17 billion) during fiscal 2015. Mobile ads currently account for about 80% of the company’s revenue.

Global Reach

Global in its reach, Facebook generated more than half of its revenue outside the US in fiscal 2015. The majority of its international business comes from customers located in Western Europe, Australia, Brazil, Canada, and China. The company sees Brazil and India in particular as key sources of growth. Facebook has offices and data center facilities located all over the world.

Constant Innovation

The company’s strategy includes making key acquisitions to add specialized employees and complementary companies, products, or technologies. Facebook also continues to invest in its own core products and services to better serve its existing users and customers.

Michael McLellan covers the business of restaurants, marketing, media, technology, and more for D&B and Hoover’s. He is a graduate of the University of Texas at Austin’s Radio-Television-Film program.


Image by Pete Linforth

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