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Facebook quarterly profit doubles to $3.7b

Number using world-leading social network increases 17% to 1.86b in final quarter of 2016

Image Credit: AP
A man walks past a mural in an office on the Facebook campus in Menlo Park, California.

San Francisco: Facebook reported on Wednesday that its profit more than doubled in the final three months of last year as revenues climbed and its user base grew.

In earnings which topped most forecasts, Facebook said it made a net profit of $3.7 billion (Dh13.6 billion) on revenue of $8.6 billion in the fourth quarter, as compared with profit of $1.6 billion on $5.6 billion in revenue in the same period a year earlier.

Meanwhile, the number of people using the leading social network monthly increased 17 percent to 1.86 billion. The ranks of people accessing Facebook from mobile devices each month grew to 1.74 billion, an increase of 21 percent from the same period a year earlier.

Money taken in from ads on mobile devices accounted for approximately 84 percent of the social networks overall advertising revenue in the final quarter of last year.

“We believe concerns over user engagement and other social competitors are likely overblown, as few companies share Facebook’s combination of scale, strong technology orientation, and platform breath/diversity,” Baird research analyst Colin Sebastian said in a note to investors.

Facebook shares were up about two percent to 134.78 in after-market trades that followed release of the quarterly earnings figures, which topped market expectations.

“Our business did well in 2016, but we have a lot of work ahead to help bring people together,” said Facebook co-founder and chief executive Mark Zuckerberg.

“Our mission to connect the world is more important now than ever.”

Tackling hoaxes

Under pressure to stymie the spread of fake news, Facebook last month modified its system for showing trending topics.

The change was intended to surface topics more quickly, capture a broader range of news, and help ensure that trends reflect real world events being covered by multiple news outlets, Facebook said.

Zuckerberg has sought to deflect criticism that the huge social network may have been used to fuel the spread of misinformation that impacted the 2016 US presidential race.

“We don’t write the news that you read but we want to be a place where people can access information, have meaningful conversations and this is a responsibility that we take very seriously,” Zuckerberg said.

“In the past, we’ve taken steps to reduce spam and click-bait and now we’re you approaching misinformation and hoaxes the same way.”

Facebook executives expected this to be an “aggressive” year for investment by the California-based company, with priorities including data centers, virtual reality, search and artificial intelligence.

AI has the potential to help figure out and find videos or other content people might like at Facebook, and to quickly recognize and remove posts that violate community standards, according to Zuckerberg.

“There’s an increasing focus on objectionable content and a lot of unfortunate things that people share on Facebook,” Zuckerberg said, stressing that it was a small piece of what was shared at the social network.

“AI is both going to be great on showing people content that’s really good and helping us enforce the community standards that we have to make sure that everyone has a good and fair experience

Stolen tech suit

Zuckerberg described virtual reality as a long-range investment and asked investors to be patient.

“We are going to keep making big investments in VR content, and I am excited about what is coming in 2017, from games to more immersive experiences,” Zuckerberg said.

A US jury Wednesday ordered Facebook and creators of its Oculus Rift to pay $500 million to gaming software firm ZeniMax in a lawsuit that claimed the virtual reality technology was stolen.

The Texas jury made the award in a trial in which Oculus was accused of basing its Rift headset on technology stolen from ZeniMax’s virtual reality software, court documents showed.

The lawsuit claimed Oculus founder Palmer Luckey and his colleagues developed the virtual reality gear using source code illegally obtained from the gaming firm.

ZeniMax had sought $4 billion in damages in the case, in which Zuckerberg testified to defend his company.

Facebook acquired Oculus in 2014 for more than $2 billion and last year began selling the Rift headsets as part of the social network’s push into virtual reality.