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 offered no financial forecasts to ease worries over the prospects for boosting advertising in its first earnings report as a public company, sending its shares to a record low.
Facebook executives pointed to early signs of success in new advertising services, but the lack of a detailed financial outlook went over poorly with investors hoping for evidence that the company could soon reverse the continuing slowdown in its business.
"The question is, do you get a re-acceleration in the business at some point?" said Oppenheimer & Co analyst Jason Helfstein. "Because they didn't give you guidance, you're going to have to wait to find out what happens."
Shares of Facebook, which have shed a third of their value since their haphazard May debut at $38, broke below $24 in frenzied after-hours trading. The social networking pioneer was the first American company to debut with a market value of more than $100 billion.
Mark Zuckerberg, the 28-year-old chief executive who created Facebook in his Harvard dorm room, said 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.
"Mobile is a huge opportunity for Facebook," said Zuckerberg, noting that the company was investing "very heavily" in improving its mobile apps.
The company, which competes with established Web companies such as Google Inc and Yahoo Inc, said its capital expenditures more than tripled to $413 million in the second quarter.
Facebook's finance chief also said operating expenses in the second half of the year would increase significantly compared with the rate in year-ago period. Continued...