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article imageFacebook approaches two billion users as profit spikes

By James Walker     May 4, 2017 in Technology
Facebook has revealed it will soon pass the two billion user mark, its most significant milestone yet. The company has surprised analysts by announcing better than expected results in its first-quarter earnings call, caused by a rise in ad revenue.
In its report, Facebook said it had 1.94 billion monthly active users on March 31st, an increase of around 300 million from the same time last year. This means it should reach 2 billion users within a few months. Around 1.3 billion people log onto the platform every day.
Facebook announced strong financial gains in the quarter, posting a profit of $3 billion. This is a 76% increase over 2016, indicating the company is now capable of making significant amounts of money. The majority of the company's revenue is still  being driven by advertisers though, something Facebook itself admits will soon start to decline.
Although ad revenue rose 51% during the period, Facebook recognised it's running out of users to put ads in front of. With the number of remaining places to display ads in also dwindling, the company will soon reach its revenue peak and be left looking for new sources of income. Facebook Chief Financial Officer David Wehner warned growth in ad income will slow throughout the rest of the year.
Facebook is beginning to indicate where its next revenue stream will come from. The company is reinventing itself as a video-first platform, aiming to push into the TV market and offer a new kind of on-demand service. The effort lends itself well to monetisation, giving Facebook a dependable place to look to when it outgrows relying on ads alone.
Facebook is also expanding its other emerging focus areas, including augmented reality and photographic tools. The recent launch of the company's new camera platform and the success of Instagram Stories and WhatsApp Status has demonstrated Facebook can still attract vast swathes of users to new ideas.
According to Facebook CEO Mark Zuckerberg, the company's overarching aim will surround "building community." Speaking during the earnings call, he outlined how he wants Facebook to support wider social effort. This stands in contrast to the company's traditional role in enabling smaller interactions between family, friends and public entities.
"Building global community is bigger than any one organization, but we can help by developing social infrastructure for community – for supporting us, for keeping us safe, for informing us, for civic engagement, and for including everyone," Zuckerberg said.
As part of this ambition, Zuckerberg addressed Facebook's ongoing problem around safety and online abuse. In response to the recent atrocities committed using Facebook's Live Video, he announced that 3,000 new moderators will join the company's community operations team. Working alongside the 4,500 existing employees, they'll be helping to manually review reports and requests for help sent in by users.
As Facebook nears its peak and hits its revenue cap, the company is being forced to evolve into a different kind of business. It will now need to concentrate on cultivating engagement across its entire product portfolio, including Messenger, Instagram, WhatsApp, augmented reality, video and its core platform. With a quarter of the world's population now registered on Facebook, the company faces the unusual problem of running out of people to pitch itself to.
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