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Facebook’s revenue rockets on strong growth

Facebook has reported a 186% year-on-year increase in second-quarter profits driven by a 63% rise in advertising revenue boosted by demand for video ads

Facebook has reported second-quarter revenues of $6.44bn, up 59% compared with the same period a year ago and $420m higher than market forecasts.

Advertising revenue was up 63% to $6.24bn, and accounted for 97% of the social networking company’s total revenue. 

Profits were up 186% year on year to $2.06bn, while the number of monthly active users is up 15% to 1.71 billion, with 1.57 billion using mobile devices, an increase of 20% year on year and 91% of the total.

Facebook said daily users now number an average of 1.13 billion, an increase of 17% compared with a year ago.

With most users accessing Facebook from mobile devices, mobile advertising accounts for around 84% of total advertising revenue, up from around 76% in the second quarter of 2015.

“Our community and business had another good quarter,” said  Mark Zuckerberg Facebook  founder and CEO. “We're particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services.”

In recent months, Facebook has introduced 360 video, which provides a 360-degree view of videos, and Facebook Live, which enables any Facebook user to broadcast video live to the world.

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According to eMarketer, Facebook’s global ad revenues will account for more than two-thirds of all social media revenue in 2016. The market research company estimates that Facebook’s figure for the year will hit $22.37bn, up from 2015’s $17.08bn.

Facebook’s results are in sharp contrast to those of Twitter, which has reported its slowest quarterly sales growth in three years, with revenue up just 20% year on year to $602m and a rise of just 3% in the number of monthly active users  to 313 million.

Twitter is yet to make a profit, but it did manage to reduce its quarterly loss to $107m from $136m for the same period a year ago.

Although Twitter’s advertising revenue was up 18% to $535m, analysts said the company will find it difficult to attract advertisers without stronger growth in the number of users.

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