How Facebook built a $1bn business in 16 months
Facebook chief executive Mark Zuckerberg yesterday described his purchase of Oculus VR as key in jumping onto virtual reality which he says will become a part of everyday life and be the “next major computing platform that will come after mobile.”
To find out just how quickly Facebook can capitalise on a new business, it’s important to look at Facebook’s last high-growth business, mobile, and the speed at which the social network turned it into a $1bn business.
In June 2012 over 500m people were using Facebook’s mobile apps every month however this was generating less than $150m for the social network, not even enough for Facebook to break out the figures in its results.
By December 2013 Facebook’s mobile division had exploded into a $1.24bn business and a core part of the firm’s future strategy.
The surge in mobile growth can most clearly be seen when compared with Facebook’s other advertising efforts.
In September 2012 mobile accounted for 14 per cent of Facebook’s $1.09bn advertising revenue, by December 2013 this had exploded to 53 per cent of the firm’s $2.34bn advertising revenue.
Many questions remain around how Facebook will turn its virtual reality business into a profitable division, but if mobile teaches us anything about Mark Zuckerberg, it may happen sooner rather than later.
(All figures taken from Facebook’s earnings)