Shares of Facebook (FB) are getting hammered after hours following CFO David Wehner’s warning to analysts that one of their principal sources of income, advertising revenue, may “come down meaningfully” in 2017 due to “ad load,” and that they may also come up short in Q4 2016.
What is “ad load” you might ask? It’s a nice way of saying that there’s a level at which customers are so turned off by advertisements that they stop using the site.
“They have reached the limit of the ad frequency on news feed, so they are going to have to find revenue growth from other areas like pricing, user engagement, user base growth” said Edward Jones analyst Josh Olson.
Compounding next year’s anticipated revenue hit, Facebook plans to aggressively spend on more engineers and data centers in order to ramp up growth and capacity.
On the bright side, Facebook actually posted an otherwise solid quarter. EPS came in at $1.09/sh (.97c est), and the social media giant tacked on a 55.8% rise in q/q revenue, up to $7.01 billion ($6.92B expected). Mobile advertising accounted for 84% of Facebook’s total ad revenue in Q3, up 6% from a year earlier.
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Alright, enough is enough, Get this guy a permanent spot on IBC.
He’s been doing nothing but posting since he got the honor of writing here.
You got my vote kid.
When a founder is starting a “Foundation” it equals fucking sell.
That happened a lot of points lower, but your point remains.
Call it possible dead money. Known seller and all.