Facebook's second-quarter earnings showed that its ad business continues to boom, with ad revenue jumping 47% year-over-year to $9.16 billion during the quarter. The better-than-expected results sent shares higher 4.3% in pre-market trading on Thursday.
On a call with investors late Wednesday, Facebook gave some visibility into where the company might be headed next, including monetization of its Messenger and WhatsApp platforms and the future of AR and VR on the platform, among other things.
But for now, advertising remains the crux of Facebook's revenue stream. COO Sheryl Sandberg talked at length about how Facebook is proving to advertisers that it's the best place for them to spend their ad dollars.
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To be sure, Facebook's 2 billion-wide user base should be enough to lure them. The company's daily active users rose 17% year-over-year to 1.32 billion during the quarter, while monthly active users also jumped 17% year-over-year to 2.01 billion.
Facebook's biggest focus is on helping brands take advantage of mobile advertising, Sandberg said. The company's mobile business continues to soar to new heights, making up 87% of its total ad revenue during the quarter, up from the 84% it comprised during the same period a year ago.
Sandberg told investors on the call that the company now has more than 70 million businesses on Facebook and 15 million businesses on Instagram. This represents a big opportunity for Facebook to further its video-first strategy -- one that Zuckerberg has reiterated for several quarters now.
Facebook's investments in video are part of what's fueling its operating expenses, which CFO David Wehner actually cut on the earnings call. The company now expects expenses to go up 40% to 45%, instead of its prior forecast of 40% to 50%.
As Facebook continues to embrace its mobile-centric vision, it's also had to help brands and companies create advertisements that make sense for mobile platforms, Sandberg said.
"People consume content faster on their phones and marketers are increasingly recognizing that this behavior is different than on other media," she explained. "This means that developing short form snapable content is a build opportunity on mobile."
To that end, Facebook has tried to show brands that investments in mobile can pay off by providing them with more targeted and detailed ad data. This is something that Facebook rival Snap Inc. (SNAP - Get Report) has also been focusing on.
"Our goal is to be the best dollar and best minute that anyone spends," Sandberg said. "We have our work cut out for us to help them evolve their ads. We're making progress but we have a long way to get there."
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