Facebook is on a roll. Last month, Facebook reached 2 billion active users and its stock is trading at a high record of $165.12 per share. But Mark Zuckerberg has started having nightmares as its exceptional growth is about to slow down because Facebook’s news feed loses money at an alarming rate.
Analysts around the world are waiting for Facebook’s report on its earnings for second quarter of 2017. Analysts believe that Facebook will announce its revenue of $9.2 billion and earning per share of $1.13. According to Recode, year over year revenue growth has been down for four straight years.
As Facebook loses money from its advertising of news feed, a huge amount of research is been done on Testing ads for Instagram and its Messenger business.
Facebook has launched a new feature of ‘Live Video’ but it’s operational expenses are too high. According to CNBC, there’s an expectation that growing expenses related to the blossoming video side of the business will cut into Facebook’s bottom line. According to Forbes, because of this analysts have lowered their predictions for the company’s earnings for the full year, from $5.44 a share earlier in the year to $ 4.85 per share now which is equivalent to 11% of lower profits.Facebook’s Instagram and Snapchat are going head to head in their stories feature. According to Seeking Alpha, in the 11 months, since Instagram stories were launched, it has grown to 250 million users, far more than Snapchat’s 166 million. It is only because of Instagram that Facebook is able to reach its record high of post earning stock prices.
So, It doesn’t matter if Facebook’s news feed is losing money, Instagram is there to save the day.
