With 2bn users, Facebook profits up 71% in Q2

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Facebook's formidable ad business, along with Alphabet Inc.'s Google, soaked up 99% of the online ad industry's growth a year ago, according to Pivotal Research.

In the past two years, the social media powerhouse's numbers have eclipsed expectations by three percent in revenue and by 13 percent in earnings per share, according to Merrill Lynch analyst Justin Post. Of that amount, 87 percent came from mobile advertising, a sweet spot because advertisers increasingly are chasing consumers on their mobile devices.

United States social media giant Facebook surged to record prices in after-hours trading following its report of a 71% rise in its profits for the second quarter. Mobile ad revenue accounted for 87% of Facebook's almost $9.2 billion in ad revenue-with mobile video ads making an especially strong showing.

In the Q2 Earnings call Wednesday, Facebook's leadership, including CEO Mark Zuckerberg, COO Sheryl Sandberg and CFO David Wehner, touched on the technological innovations and advertising strategies that Facebook will focus on as it heads into the second half of the year.

Facebook said about 2.01 billion people were using its service monthly as of June 30, up 17% from a year earlier.

The daily active users (DAUs) were 1.32 billion on average for June 2017, an increase of 17 per cent year-over-year.

The tech giant has manged to double its audience over the last five years after reaching the one billion user landmark in October 2012.

Most notably, Zuckerberg revealed that WhatsApp now has 1 billion daily users, and 250 million daily users of WhatsApp Status - its Snapchat Stories clone. "Each of those has over 250m daily active users", Wehner said.

Facebook Messenger and WhatsApp, two of the company's messaging properties, are just now starting to dabble in generating revenue. Facebook, Inc. The company has a market capitalization of $479.01 billion, a P/E ratio of 42.02 and a beta of 0.67.

Within a few weeks, Facebook should start its video service that includes scripted shows, which is a big change for a company built upon content that is user-generated.

Nobody can engage users at a global scale like Facebook. "So far, I think Facebook has been able to balance that with things like Instagram, video advertising, and soon, Messenger".

Facebook told developers and businesses the Messenger ads would only be for brands that people "love" or that offer an "opportunity to discover experiences".

Facebook's stock price rose as high as $173 per share in the after-hours trading on Wall Street, after closing the day at $165.61 a share.

The company is also planning on spending less than it believed earlier in the year.

Shares of Facebook are up roughly 40% this year, demonstrating assurance from investors that the company can diversify the sources of its revenue growth and continue to grow its user base.

On a more ominous note, Zuckerberg took a moment to say he was unsatisfied with the progress of monetising Messenger, saying: "I want to see us move a little faster here, but I'm confident we're going to get it right".