Facebook Reports Payments Business Results

by Mercator Advisory Group 0

Facebook’s Payments revenues increased a litle more than 3% percent from $186 million to $192 million in the most recent quarter.

From TechCrunch:

As smartphones have taken off (with Facebook now seeing 543 million active users every month), Android and iOS have become lucrative ecosystems for game developers with some titles earning between $3 and 5 million a month. However, Facebook does not earn any revenue from titles on these platforms even if the social network drives user acquisition for these developers. Facebook’s chief financial officer David Ebersman said on today’s earnings call that mobile growth was partially responsible for stagnation in payments revenue.

At the same time, the company hasn’t yet turned on revenue for other kinds of non-gaming apps even though it has driven a significant amount of traffic to apps like Spotify and social news readers. Even if the company did ask for a revenue share from these types of apps, it would probably be lower than the standard 30 percent cut it asks for from game developers, Facebook chief executive Mark Zuckerberg said on the call today. It’s not clear how much a share of Spotify subscriptions or other types of digital content sales would drive to Facebook.

Facebook’s Payments segment is in the middle of a transformative process. Facebook recently announced over the remainder of the year it will phase out its Credits platform, the original foundation of the company’s payments strategy. This has the potential to expand Facebook’s Payments business beyond digital goods, but Facebook hasn’t commented on the company’s long-term strategy.

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