Facebook revenue growth skids, shares plunge
By Alexei Oreskovic and Gerry Shih
SAN FRANCISCO (Reuters) - Facebook Inc reported a drastic slowdown in revenue growth and failed to offer financial forecasts to quell fears about its ability to boost advertising growth, sending its shares plummeting to a record low.
In its inaugural earnings report since becoming the first American company to debut with a value of more than $100 billion, Facebook reported revenue increased 32 percent in the second quarter to $1.18 billion, in line with average forecasts.
But it offered no outlook for the current period as some investors had hoped.
Shares of Facebook, which has shed a third of its value since its haphazard May debut at $38, hit below $24 in frenzied after-hours trading.
Mark Zuckerberg, the 28-year-old Chief Executive who created Facebook in his Harvard dorm room, said that the company was seeing encouraging results from newly-introduced advertising services and that Facebook now has a "clear path" to building a strong mobile business.
Facebook has raced through eight years of break-neck growth that was to have culminated with its May coming-out party.
Instead, its share price has headed south as investors questioned its valuation of more than 50 times earnings, and its longer-term ability to sustain growth with users migrating to mobile devices.
Monthly active users grew to 955 million at the end of the second quarter, up from 901 million at the end of March. But mobile monthly active users surged 67 percent year-on-year to 543 million users, adding further pressure on Facebook's business, which only recently began to offer limited forms of mobile advertising. Continued...