Facebook 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

1.23 Billion users

“ore than 1.23 billion people now use Facebook each month. Last quarter was our first quarter where more than 50% of our ad revenue came from mobile.”

Still only 1/3 of the world’s population has internet

“Only one-third of the world’s population has access to the internet today, and for even many of those, the return on experience remains pretty weak.”

Huge growth

“Our total revenue grew 63% year over year, led by 76% growth in advertising revenue. Approximately 53% of our ad revenue came from mobile.”

Personalized marketing

“Before mass media, all business was personal. Sales happened customer by customer at the local store or door to door. The evolution of mass media made it possible to sell at scale, but business was no longer personal.

On Facebook, marketers can do both. We’re building the world’s first global platform that lets marketers personalize their messages at unprecedented scale. This is marketing where you are for who you are.”

Could sell more ads if they wanted to but focused on experience

“the strategy has been, for the last period, and will continue to be, to primarily focus on increasing the quality of the ads and the experience.

And I really think that it’s easy to look at the model and say, okay, if we ran more ads then the business would grow faster in the short term, but investing in quality is really actually the most important thing, because it’s what improves the experience for the people who use the product. It drives greater returns for advertisers, and over time it increases the potential size of our business.”

Ramped up ads with little sacrifice to user experience

“we’re really one or two years into this, and we’re still learning how to provide the best experience. I think one of the most important pieces of positive news from 2013 was as we ramped up newsfeed ads, they performed as well as they did, delivering great value for marketers, having a very minimal effect on the user experience, and enabling Facebook to deliver the kind of results that we reported today.”

We take teens very seriously, focused on that problem

“In terms of teens, we don’t have any new data to report today. As you know, we take engagement very seriously, and we’re focused on building great products that all our users, including teens, will find useful and engaging.”

It’s about sharing.

“some of the things that we’re thinking about are all of the different kinds of ways that people might want to share different kinds of content with different audiences.”

Facebook’s three, five and ten year plan

“we talk about our strategy, and there’s a three-year strategy, a five-year strategy, and a 10-year strategy. And the three-year plan is really all about building new kinds of experiences for sharing, like so many of the questions on this call have been about. The five-year approach is really mostly about helping people use their network to answer interesting questions or solve problems that they have…But over a 10-year period, if we can get a lot more of the world on the internet, I think that’s going to really mean a quite different world in terms of what folks in a lot of developing countries have access to in terms of some of the things I said in my opening remarks, around basic financial services, and people can get credit to start businesses, and buy homes, really life-changing stuff, or get access to health information or education materials, which I think are just a really big deal.”

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