Facebook: 2015 Is an Infrastructure Spend Year
Facebook is promising to spend more on infrastructure in 2015 as social media users spend more time on its platform.
"Engagement across the different regions is up," said CEO Mark Zuckerberg on the company's second-quarter conference call. Video and its constantly updating Newsfeed feature on the platform are driving engagement.
Daily active users are at 968 million, up 17% year-on-year. Mobile continues to boom with daily users on devices at 844 million, up 29%. This is all helping to up spending on Facebook's underlying infrastructure in 2015.
"On capex, we are absolutely investing in the infrastructure, and 2015 is an investment year, so we are ramping capex versus 2014," said Dave Wehner, Facebook's CFO on the Wednesday evening call.
The capex guidance is $2.5 to $3 billion, up from $1.8 billion last. Much of the spend will be on data center updates, servers and network additions.
After video, Facebook is betting that immersive virtual reality offerings will help to drive usage. To that end, Facebook's Oculus Rift VR hardware will ship in the first quarter of 2016.
"I think that immersive 3D content will be the next big thing after video," said Zuckerberg. Video and gaming will be early drivers for the technology. But Facebook is interested in social applications for immersive 3D in the future, Zuckerberg added.
Facebook posted revenues of $4.04 billion, up 39% year-on-year. The company also beat Wall Street's expectations for its earnings per share by 3 cents with EPS of $0.50. The company's GAAP net income, however, was down 9% at $719 million compared to the year-ago quarter.
— Dan Jones, Mobile Editor, Light Reading