Tomahawk, WI 8/09/2013 (Basicsmedia) – Facebook Inc (NASDAQ:FB) has been quite aggressive in the market, although things might not have gone the way it had hoped. When FB launched its IPO, there was a lot of hope that the company would perform much better than its predecessors had ever done. However, the poor performance with regard to its IPO has not scared the FB in any way, and the company has decided to continue making further investments as proof that it believes in its future. Here in this article, we will take a look at some of the investments which FB has made in 2013, and what they mean to investors.

What Are These Investments?

One of the major investments FB is making is worth more than $1.6 billion. FB has been able to make such a huge investment because it has just seen its market penetration improve manifold in both India and Brazil, which are heavily populated. The company has invested more than $595 million, which has been used in the construction and setting up of storage infrastructure and data centers to give a boost to its market penetration endeavors. The company has also spent more than $221 million of its resources which it has invested in acquisitions and patents.

Where Does FB Get This Money From?

FB relies heavily on its user base, where reports indicate that this number has gone beyond1 billion users worldwide. Secondly, its mobile advertising base is quite large and solid hence able to provide the company with the huge financial resources it needs in order to make the kind of investments it has done in 2013, and beyond. Remember that the company reported that it had brought in more than 60% of its total revenues, which is close to $1.60 billion, from mobile advertisements in the second quarter of 2013 only.

The reliance on mobile ads is something which is not limited to FB only, since its major competitor in this field, Google, reported more than 90% of its total revenues from this segment. FB relies a lot on money it makes from advertisements, out of which mobile ads bring in more than 40% of this amount. When you combine this with the fact that it is seeing a surge in its user base, you then begin to get a clear understanding of why it has the wherewithal to make such massive investments, which other companies are unable to attract as revenue in a single year.

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Image shows FB’s impressive user growth.

It is courtesy of www.empowernetwork.com

FB’s Financial Results for Q2 2013 vs Q2 2012

In the April to June quarter of 2012, FB reported a loss of around $157 million, compared with net income of roughly $333 million reported in 2013. In the second quarter of 2012, its revenue was $1.18 billion, compared with $1.81 billion it reported in 2013. Daily active users in the month of June 2012, was put at around 552 million. This year, 2013, the company has seen an increase in its daily active users where close to 699 million were reported in June 2013 only. FB’s position is enviable. It is stable and financially strong, and I hope there is more to come.

FB still has great potential for growth, probably more than it has already encountered. The company is in stable hands, and the management loves innovativeness which will hopefully, continue making this a profitable investment option for many investors.

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