After posting a highly successful third quarter sales growth of the social network giant Facebook, it may have a hard time exceeding the past quarter's sales results in the coming months and may raise fears among investors.
This is the result of the social networking giant about to reach the limit of their 'ad loads' or the 'user facing' advertisements that is responsible for the big chunk of revenue it generates for the company. This, despite reports of surging revenue that went up 56% - up to $ 7 billion - for the third quarter this year compared to the same period in 2015.
David Wehner, Facebook CFO, has already opened talks for possible 'aggressive investments' for 2017 as the company sees "ad revenue growth rates come down meaningfully." Wehner points out that there is a regulated limit on the number of advertisements that can be placed for users. The stock market's close of business immediately resulted in a drop in Facebook share prices by as much as 7% percent Wednesday.
Among the targetted investments that could spur additional sales potential for the company is by leveraging on the Facebook messenger and WhatsApp interactions for business and premium customers.
Stock market analysts, on the other hand, are seeing a good opportunity to start buying good market shares with the drop in share prices as the projected setback could only be a temporary bump in the road. On Thursday, Facebook shares dropped by 5.5% in the early hours of trading, accounting for as much as $20 billion of its market value.
Analysts believe that the long-term plans for Facebook remain strong and that this could be taken as a good opportunity to start buying shares at better rates. Also with the projected investment and revenue-generating programs for 2017, they see that Facebook will be able to see progressive growth and have a good outlook for 2017 and beyond.
