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Facebook Growth to Slow

Posted by ExploreMore on

Ever since the company was first established in 2005, Facebook has been one of the most exciting and dynamic organizations in the world. With daily users now well over 1 billion people, it has become by far the largest social media engine in the world. Facebook has been even more exciting to follow ever since it was first announced that they were going to unveil their IPO. In the five years since they first went public, the company has continued to impress investors with their continued growth. While the earnings have remained strong, a recent news article (http://www.fool.com/investing/2017/01/24/facebook-inc-earnings-how-long-can-this-monstrous.aspx) points out that the growth could slow.

 

In the third quarter of 2016, Facebook announced that its revenue jumped a very impressive 56% year over year. While these results are extremely impressive for any standard, most industry and financial experts agree that the growth in revenue should decline in coming years. The company has stated that they expect their fourth quarter year over year growth to be closer to 40%.

 

The reasons for the growth decline vary considerably, but most are attributed to the fact that the prior growth was impossible for any company to continue. While the company will not have as high year-over-year growth in the future, there is still a lot of room for growth going forward. In the coming year, the company will be unveiling a new ad program, which is sure to result in higher results for advertisers. This should ultimately result in more value per ad, which could have a huge impact on the company’s bottom line.

 

Facebook is also rumored to be venturing into other product lines, which will have an impact on the financial future of the company. The company will continue to look for ways to build upon their base social media engine, but will start producing more software, online sites, and other valuable programs that could help the company to continue to succeed. The company also plans on continuing to invest in both their human capital and infrastructure, which should lead to an improved output going forward.