Archived entries for growth

Slowing Growth in Facebook’s Mature Regions

In our earlier analyses, we observed that Facebook’s user base growth in North America region was outpaced by Facebook’s other regions, especially its emerging market regions Asia and rest of world. In fact, Facebook’s S-1 filing revealed to an extent that this was occurring. Based on the latest quarterly data, we can see that Facebook’s emerging market regions continue to outgrow its established markets on a sequential basis.

Facebook provides data about monthly active users (MAUs) and daily active users (DAUs). MAU data show that Facebook’s growth in North America has slowed substantially relative to growth in its other markets. At a reported 195 million monthly active users, Facebook continues to edge closer to market saturation in North America. As we can see, the growth rate has slowed to between 1% and 2% for the past three quarters.1

Facebook's monthly active users per region

According to its 10-Q, Europe region includes all users from Russia and Turkey. Europe region is therefore larger than North America; however, it shows simliar user base growth deceleration. According to Facebook, Europe region accounted for 269 million monthly active users. The region is still growing slightly faster than North America, showing 3% sequential growth. However, Europe region shows a maturation trend simliar to North America.

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Facebook’s Mobile Platform Race

As we previously discussed, in its fourth quarter earnings slides, Facebook for the first time provided color on mobile only user base growth since Q4 2011. Growth in mobile only monthly active users rose to 157 million in the fourth quarter. While the emphasis on mobile only users represents a shift in Facebook’s focus, it is important to remember that Facebook’s mobile only emphasis really started with its purchase of Instagram on April 12, 2012.

It is instructive to contrast the user base growth of both platforms. While Instagram has provided sporadic updates on its user base growth, and it is unclear whether Instagram has reported monthly active users or total registrations, the chart shows that Instagram has been growing quickly, notably without the benefit of Facebook’s network effect on Instagram’s user base growth until at least its acquisition by Facebook at month 18 in the chart.

Facebook (mobile only) and Instagram User Growth

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Revisiting Facebook’s Emerging Market ARPU

In our earlier analysis, we looked at Facebook’s emerging market average revenue per user (ARPU). We saw that while Asia and rest of world regions showed the highest rate of user base growth, they also showed the lowest ARPU. After two quarters, we can reassess Facebook’s ARPU story, taking a closer look at user growth trends and concurrent ARPU, while also considering the affect of mobile monetization in Facebook’s fastest growing regions.

Facebook continues to see healthy user base growth in its emerging markets. In the past two quarters, Facebook’s user base in Asia and rest of world regions, measured by monthly active users (MAUs), grew by 8.6% and 7.6%, respectively. Facebook saw 298 million MAUs in Asia in the quarter, and 304 million MAUs in rest of world region in the quarter. Combined, these regions represent 57% of Facebook’s overall MAUs. In absolute terms, Asia and rest of world regions continue to outgrow Facebook’s established markets.1

The average revenue per user story for Facebook’s emerging markets over the past two quarters is more positive, showing good revenue growth relative to user base growth in Asia and rest of world. In the third quarter, the company averaged $0.58 per user in Asia and $0.47 per user in rest of world region. In the fourth quarter, Facebook averaged $0.69 per user in Asia, and $0.56 per user in rest of world. Accordingly, the company saw a 5% and 18% increase in ARPU over the third quarter, respectively.

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Facebook’s Mobile Growth in the Fourth Quarter

With the release of Q4 2012 earnings, Facebook opted to release more data to color its mobile user base growth. Not only did the company released its latest mobile monthly active users, but for the first time Facebook also provided metrics for mobile only monthly active users (mobile MAUs), indicating a shift in the company’s focus toward mobile.1

Facebook’s monthly mobile active user base has been growing steadily since the company began providing metrics. Facebook saw 680 million mobile monthly active users in the quarter, an increase of 57% from the year-ago quarter. Although Facebook does not share quarterly mobile daily active users, the company indicated that mobile DAUs exceeded web-based DAUs for the first time in the company’s history.

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Continuance - Facebook Analysis by . @jonmilani. Copyright © 2017. All rights reserved. Hosted by (mt) Media Temple.