Highlights of Facebook’s 4Q 2014 Earnings Call

While a great deal of time was devoted to advertising during Facebook’s fourth-quarter and full-year-2014 earnings call Wednesday, several other topics were addressed, as well

Zuck4Q2014CommunityInfographic650While a great deal of time was devoted to advertising during Facebook’s fourth-quarter and full-year-2014 earnings call Wednesday, several other topics were addressed, as well.

Facebook co-founder and CEO Mark Zuckerberg shared the following statistics related to usage of Facebook and its applications during his opening remarks:

One interesting sign of our continued growth in engagement is through our progress on visual and public content. More than 2 billion photos are now shared daily on Facebook, Instagram, Messenger and WhatsApp. Video also grew significantly this year, with an average of more than 3 billion video views daily on Facebook. And there are now more than 2 billion interactions every week on Facebook between public figures and their fans.

Instagram is also growing and helping people share and consume the most engaging content in different communities across the world. Instagram reached 300 million monthly actives, with more than 70 percent outside of the U.S. Average time spent using the app continues to be very strong compared to other mobile services. Across Facebook and Instagram, we’ve done a very good job on engagement, especially when it comes to helping people find and consume content they like.

Next, let’s talk about our efforts over the next five years to build the next generation of Facebook services. We expect WhatsApp and Messenger to connect hundreds of millions of more people and become indispensable services for the world, as well as important contributors to our business. Messenger and WhatsApp recently achieved impressive new milestone. In November, Messenger reached 500 million monthly actives, and at the beginning of January, WhatsApp reached 700 million monthly actives, with more than 30 billion messages sent each day. These numbers speaks the quality of both products and the size of the opportunity ahead to help billions of people communicate and collaborate.

Chief operating officer Sheryl Sandberg chimed in on video:

In just one year, the number of video posts per person on Facebook increased 75 percent globally and 94 percent in the U.S. Today, over 50 percent of people in the U.S. who come to Facebook daily watch at least one video per day, and globally, over 65 percent of Facebook video views occur on mobile.

The most entertaining exchange of Wednesday’s call resulted in Zuckerberg saying he wants investors in Facebook to share the mission of the company. Sanford C. Bernstein & Co. analyst Carlos Karjner asked:

Mark, I think in every earnings call, you talk to investors for a considerable amount of time about Facebook mission to connect the world, and specifically about Internet.org, which suggests that you think this is important for investors. Can you clarify why you think this matters to investors and why you think Facebook can make a significant difference of scale?

Zuckerberg replied:

Well, it matters to the kind of investors that we want to have, because we’re a really mission-focused company, and we wake up every day and make decisions because we want to help connect the world, and that’s what we’re doing here. So part of that the subtext of your question is that yes, if we were only focused on making money, we might put all of our energy on just increasing ads to people in the U.S. and the other most developed countries. But that’s not the only thing that we care about here.

So I do think that over the long term, focusing on helping to connect everyone will be a good business opportunity for us, as well. And we may not be able to tell you exactly in how many years that’s going to happen, but I think that as these countries get more connected, the economics growth, the ad markets growth and Facebook and the other services in our community or the No. 1 and Nos. 2, 3, 4 and 5 services that people are using, then over time, we will be compensated for some of the value that we have provided. But this is why we are here: We are here because our mission is to connect the world, and I just think it’s really important than investors know that.

Sterne Agee analyst Arvind Bhatia brought up the potential monetization of WhatsApp with this question:

Just quickly on WhatsApp, I know the focus will be user growth for a while, but in the future, as you do turn on the monetization engine, just curious: What are some of the primary ways that you’re assuming growth will come — from advertising, or games perhaps? And also on WhatsApp user growth, would you be able to call out where that’s coming from? Are there any particular areas that are stronger, and I’m curious how that’s doing in the U.S.?

Zuckerberg responded:

So you’re right that the focus for WhatsApp is on helping to connect a lot more people, all right. So when (WhatsApp co-founder and CEO and Facebook board member Jan Koum) and his team joined us, one of the first things that we agreed on, and why I think it made sense for them to join, is that now, they can focus for a few years on getting to 1 billion and continuing to scale beyond that. SMS is an incredibly global and universal product, and I think WhatsApp just has a huge opportunity to serve billions of people. In terms of what the business looks like, I mean, at the end of the day, it’s a distribution business, like Facebook and Instagram — how do you most effectively convert that into business opportunities for customers, whether that’s through payments or ads or other different kinds of structures.

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