Facebook this morning revealed how it is destroying established media, especially newspapers and magazine and their online attempts to survive, as well as online news and other websites. Last year was a banner year with record revenues, user numbers and profits — so much so that Facebook is sucking up revenue (much of it used to go to other companies) at a rate of more than US$500 million a week. The number of monthly users of Facebook now exceeds the population of India — 1.86 billion in total and 1.74 million on mobiles.

The December quarterly report reveals the company is now making a profit of 52 cents on every dollar (in the three months to December 31), boosting revenue over the year by 54% (and profits by 177% to US$10.2 billion for the year). It is now far more profitable than Apple (which has a profit margin around 38% at the moment) So it is no wonder that Facebook ended up with cash and securities totaling US$29.5 billion, up from US$18.4 billion at the end of 2015. That is the revenue and profits of the established media — print, magazines, radio, TV and their online businesses are being sucked dry by the day by Facebook.

Mobile ad revenue represented 84% of Facebook’s total ad revenue during the quarter. That’s up from 80% in the year-earlier period, but steady on the September quarter. Net income was US$3.5 billion in the three months to December and US$10.2 billion for the full year. Revenue jumped 54% to US$27.6 billion for 2016 (or more than US$500 million a week) from US$17.9 billion the year before and more than double 2014’s US$12.4 billion. And profit margins for the year were 45% in 2016, up from 35% in 2015. — Glenn Dyer

Peter Fray

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Peter Fray
Editor-in-chief of Crikey