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Facebook Suffers From Cost Increases

24 Apr

Facebook Suffers From Cost Increases

 

The R&D expenses indicate that Facebook would soon be able to introduce various high-tech services, but it should devise strategies to manage its products in the best possible manners and take measures to reduce costs.

Facebook has suffered from a bad news, as its sales revenue growth declines. Facebook news reported that the company has declared its slowest growth in two years. Its overall financial position has deteriorated due to its heavy expenditure on research and development. Company sources revealed that the corporate giant is all geared up to invest heavily in 2015. The funds would be invested in the expansion of a number of products that include photo sharing service, Instagram, and a messaging application, Whatsapp.

Facebook news today affirmed that the company’s research and development cost has increased by 133%, which indicates that its financial resources have been burdened. The promotional expenses have increased by 200%, which have benefited the company, as the monthly active users of the social network have also increased by 13%.

Industry sources have revealed that the majority of the added users have accessed the service from their phones. This report explains that the smartphones have contributed to the progress of the networking website as well. Experts state that the ‘giant’ should emphasize on cost reduction, while its management responds that it has controlled its spending.

Company sources have highlighted that the appreciation of the US currency has decreased the corporate revenue. The company has declared that its net income has declined by more than 20%. Stock market sources reported that the shareholders would earn 40 cents per share. The firm’s share value has decreased by 2%. Stock market experts believe that the fall in the stock’s demand has forced the decline.

Furthermore, the sales revenue has increased by 42%, as reported by Facebook breaking news. The mismatch between the revenue and cost increases has contributed to the problems of the social network. If the organization’s revenue additions exceed the cost additions, then it is expected to recover soon. The rapid hiring has also contributed to the costs, as the head count has increased by 50%.

Facebook’s main site has proved to be a major revenue source. One could say that the diversification of the services of the network has also played a role in its costs. The ‘network service’ should devise efficient operational strategies to cut down its costs, as it is the need of the hour for its survival. The investors of the social network should recommend expense reduction measures to the management; otherwise, they would bear huge losses.

The R&D expenses indicate that Facebook would soon be able to introduce various high-tech services, but it should devise strategies to manage its products in the best possible manner.

 

 

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Posted by on April 24, 2015 in Facebook, Technology

 

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