Facebook’ s huge growth is against to business books. We havent been told this at college. No company can gain profit over profit. Now, they announced that their first-quarter earnings and revenue declined from the fourth quarter, as a surge in spending on marketing and product research ahead of its initial public offering.
For the March ended quarter, Facebook posted total revenue of $1.06 billion up 45% from the same period last year but down 6% from the fourth quarter. The sequential decline in revenue came despite a steady increase in monthly active users to 901 million, from 845 million in December.
The social network, which makes the majority of its revenue from advertising, has attracted some potential investors for the rocketing growth of its advertising business, but encountered some seasonality in that business.
Facebook, in its regulatory filing, said average revenue per user, or ARPU, declined 12% from the fourth quarter. The company attributed the decline to “seasonal trends” and the fact that user growth was higher in markets where it generates less revenue per user.