Facebook posts strong 4Q as company closes gap with Google

San Francisco: Facebook Inc. delivered another quarter of record revenue that topped estimates as it sells more ads via videos, mobile devices and the Instagram photo-sharing service, sending its shares up more than 8%.

Facebook knows how to win friendsThe company ended the quarter with 1.59 billion monthly users, a 14% annual increase. Facebook’s daily active users on mobile now total to 934 million, on average, an increase of 25 percent.

Total revenue rose to $5.84bn from $3.85bn a year earlier, with ad revenue increasing 56.8% to $5.64bn in the holiday shopping period, when spending on advertising typically spikes.

Facebook shares witnessed an increase of almost 12 percent in after-hours trading to $105.32 on Wednesday, after the company recently reported its earnings for the 2015 fourth quarter. The service has gained another 47 million users in the final quarter of 2015 to broaden its global audience to 1.6 billion.

The results marked the first time that Facebook’s quarterly revenue has surpassed $5 billion. Facebook also notes that 80 percent of its ad revenue stems from mobile, an increase of 69 percent over previous year.

Mark Zuckerberg, Facebook’s co-founder and chief executive during a Facebook press event to introduce “Home” a series of applications that integrates the Facebook platform into the Android operating system, in Menlo Park, California, April 4, 2013. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Facebook shares closed at US$109.11 (RM451), putting its market capitalisation at about US$308.6bil (RM1.27tril).

Facebook’s revenue jumped 51.7 per cent partly due to an improved mobile app.

This spring’s debut of the Oculus Rift headset, part of the virtual-reality technology that Facebook bought for $2 billion in 2014, could open another lucrative market.

Reporting fourth quarter earnings after market close Wednesday, Facebook released a slew of new metrics showcasing its strength in mobile.

Facebook’s strong quarter contrasted with a disappointing performance by Apple Inc (AAPL.O), which is worth about $519 billion, making it the most valuable USA company. The figure is more than China’s population, of 1.3 billion people.

Analyst Rob Sanderson of MKM Partners said Facebook’s core business is so strong that many people won’t be scrambling for them to start monetizing other properties anytime soon.

Industry tracker eMarketer expects Facebook to continue to dominate when it comes to online display advertising.