Facebook Earnings
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Transcript of Facebook Earnings
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8/9/2019 Facebook Earnings
1/33
Facebook's (FB) CEO Mark Zuckerberg on Q2 2014
Results - Earnngs Call !ranscr"t#ul$ 2%& 2014 102 M E! * +boutFacebook (FB)
Facebook ,nc$ (+./+QFB)
Q2 2014 Earnngs Conerence Call
#ul 2%& 2014 000 M E!
Executives
/ebora Cra3or - /rector& ,R
Mark Zuckerberg - CEO
.erl .anberg - COO
/a5e 6ener - CFO
Analysts
Erc .eran - 7B.
8eater Belln - 9ol:an .acs
/ouglas +n:ut - #Morgan
Ross .anler - /eutsce Bank
#ustn ost - Merrll ;nc
Mark Maane - RBC Ca"tal Markets
+r5n Bata - .terne +gee
el /os - CR! Ca"tal
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8/9/2019 Facebook Earnings
2/33
Bran o3ak - .,9
Bran t= - #e>eres
Coln .ebastan - Robert Bar
Ben .cacter - Mac?uare
Operator
9oo aternoon$ M na:e s #a an , 3ll be our conerence o"erator toa$
+t ts t:e& , 3oul lke to 3elco:e e5erone to te Facebook .econ
Quarter Earnngs Conerence Call$ +ll lnes a5e been "lace on :ute to
"re5ent an backgroun nose$ +ter te s"eakers' re:arks& tere 3ll be a
?ueston-an-ans3er sesson$ (O"erator ,nstructons)$ !ank ou 5er :uc$
Ms$ /ebora Cra3or& Facebook's /rector o ,n5estor Relatons& ou :a
begn$
Deborah Crawford
!ank ou$ 9oo aternoon an 3elco:e to Facebook@s secon ?uarter
earnngs conerence call$ #onng :e toa to talk about our results are Mark
Zuckerberg& CEO& .erl .anberg& COO an /a5e 6ener& CFO$ Beore 3e
get starte& , 3oul lke to take ts o""ortunt to re:n ou tat our
re:arks toa 3ll nclue or3ar-lookng state:ents& an actual results
:a >er :aterall ro: tose conte:"late b tese or3ar-lookng
state:ents$ Factors tat coul cause tese results to >er :aterall are set
ort n toa@s "ress release an our Quarterl Re"ort on For: 10-< Ale
3t te .EC$ +n or3ar-lookng state:ents tat 3e :ake on ts call are
base on assu:"tons as o toa an 3e unertake no oblgaton to u"ate
tese state:ents as a result o ne3 nor:aton or uture e5ents$
/urng ts call 3e 3ll "resent bot 9++ an non-9++ Anancal :easures$
+ reconclaton o 9++ to non-9++ :easures s nclue n toa@s
earnngs "ress release$ !e "ress release an an acco:"anng n5estor
"resentaton are a5alable on our 6eb ste at n5estor$b$co:$
2
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8/9/2019 Facebook Earnings
3/33
+n no3& ,@ lke to turn te call o5er to Mark$
Mark Zuckerberg
!anks /ebora& an tanks e5erone or onng toa$ !s 3as a goo
?uarter or us an a goo en to te Arst al o te ear$ 6e@5e contnue togro3 our co::unt n s=e an engage:ent 3t 1$%2 bllon "eo"le no3
connectng on Facebook eac :ont& an %D o te: 5stng al$ Our
:o:entu: re:ans es"ecall strong on :oble to no3 2 :llon "eo"le
usng Facebook e5era 3t :ore tan 0 :llon "eo"le usng our
ser5ces on :oble e5er a$
One tng tat@s eGctng s tat tere s stll so :uc roo: to gro3$ On
a5erage& "eo"le on te Facebook n te 7$.$ s"en aroun 40 :nutes eaca usng our ser5ce& nclung about one n A5e :nutes on :oble$ !s s
:ore tan an oter a"" b are& but o5erall "eo"le n te 7$.$ s"en about
nne ours "er a engagng 3t gtal :ea on !Hs& "ones an
co:"uters$ .o tere s a bg o""ortunt to :"ro5e te 3a tat "eo"le
connect an sare across -- o3 3e all engage 3t te rest o :ea as 3ell$
o3 3en t co:es to our busness& 3e contnue to be "lease 3t our
gro3t$ !s ?uarter& our total re5enue gre3 to o5er 2$ bllon an
a5ertsng re5enue gre3 b ID ro: a ear ago$ Moble no3 accounts or
2D o our a5ertsng re5enue& 3c s a goo sgn o o3 te gro3t o
our co::unt :oble s also "roucng better busness results or our
"artners$ !e results ts ?uarter so3 our contnue ocus on :"ro5ng our
core "roucts an busness$ 6e@re gong to contnue n5estng aggress5el
n areas tat are :"ortant or our :sson an long ter: strateg& but 3e@re
also gong to sta ocuse on our core "roucts an busness$ !s s te best
3a or us to contnue creatng 5alue or our co::unt$
o3 let@s talk about o3 3e@re :akng "rogress an our tree bg co:"an
goalsJ connectng e5eroneJ unerstanng te 3orlJ an bulng te
kno3lege econo:$ Our strateg or connectng e5erone as t3o basc
a""roaces$ Our Arst a""roac s ,nternet$orgJ our e>ort to brng a>orable
%
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8/9/2019 Facebook Earnings
4/33
,nternet access to e5er "erson n te 3orl$ Our secon a""roac s b
g5ng e5erone :ore tools or connectng& so te can sare all te >erent
kns o content te 3ant 3t te rgt "eo"le$ ,nstagra:& Messenger an
creat5e la"to"s are a "art o te secon a""roac$
.o 3t ,nternet$org ts ?uarter 3e@5e contnue to ee"en our "artners"s
3t global o"erators an la a ounaton or runnng tests n :ore
countres$ +lrea& our ntal "artners"s n te l""ne& aragua an
!an=ana a5e el"e aroun % :llon "eo"le connect to te ,nternet 3o
a no access beore$ 6e@re reall "rou o tese earl results$ ,n #une 3e
ac?ure rte& 3c as a lot o eG"ertse brngng a>orable ,nternet
access to co::untes b "artnerng 3t :oble o"erators& a"" e5elo"ers
an content "ro5ers$ ;ater ts ear& 3e eG"ect to launc a broaer set o
ree basc ,nternet ser5ces n a nu:ber o oter countres as 3ell$
,n our a"" e>orts& 3e@re contnung to bul :o:entu: 3t :essagng$
eo"le no3 sen tan 12 bllon :essages a a on Facebook& an n +"rl
3e reace 200 :llon :ontl act5es on :essenger$ ;ast :ont 3e
announce tat /a5 Marcus 3ll be onng us ro: aal to lea our
:essagng e>orts$ 6e eG"ect /a5 to contnue gro3ng Messenger& bulng
out ne3 eG"erences to ser5e our co::unt an ult:atel to bul
Messenger nto an :"ortant busness$
,nstagra: contnues to :ake great "rogress n g5ng "eo"le ne3 3as to
sare ter stores troug "otos an 5eos$ ;ast :ont 3e :ae one o
te bggest u"ates e5er to ,nstagra: b ang ne3 creat5e tools tat
allo3 "eo"le to reAne eGactl o3 ter "otos look an eel$ !s s an
:"ortant "art o bulng out ,nstagra:@s ca"ablt as a "lator: an
ser5ng te creat5t o te ,nstagra: co::unt$
eGt& let@s talk about unerstanng te 3orl$ +s o last :ont& on a5erage&
:ore tan 1 bllon searc ?ueres are :ae e5er a on Facebook$ !s s a
great :lestone an t so3s 3e're n a un?ue "oston to ans3er a lot o
?uestons or "eo"le$ But ts s ust a start$ +n o5er te neGt e3 ears as
4
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8/9/2019 Facebook Earnings
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3e :ake "rogress on bulng out searc an our broaer e>orts n artAcal
ntellgence& , eG"ect us to el5er e5en greater utlt or "eo"le$
Our "rogress on "ublc content s also 5er "ro:sng$ +s "art o el"ng
"eo"le to better unerstan te 3orl& 3e 3ant to el" ou connect aroun
:"ortant "ublc :o:ents an "ersonaltes$ +n no3 nearl 00 :llon
"eo"le on Facebook are connecte to "ublc Agures$ !ese connectons are
r5ng con5ersatons at a uge scale$ /urng te 6orl Cu" o5er %0 :llon
"eo"le :ae o5er % bllon nteractons on Facebook$ !o enable e5en :ore o
tese con5ersatons& 3e'5e :"ro5e te rankng o 5eos an ne3see
an launce ne3 +,s to el" !H an :ea organ=atons use Facebook
content n ter "rouctons$ ublc content 3ll contnue to be a gro3ng
ocus or us o5er te co:ng :onts an 3e "lan to n5est n bulng :ore
great "roucts an "artners"s n ts area$
o3 bulng great socal eG"erences to ser5e our co::unt sn@t
so:etng 3e o alone$ .u""ortng e5elo"ers s a ke "art o our strateg&
an n our F conerence n +"rl 3e announce ne3 3as to el" :oble
e5elo"ers bul& gro3 an :onet=e ter a""s$ O5er 1 bllon "eo"le use
Facebook on ter "ones e5er :ont an :ore tan 0D o te to" a""s
on O. an +nro no3 use Facebook logns$ .o 3e tnk 3e@re n a great
"oston to be te cross "lator:-"lator: tat lets e5elo"ers bul great
a""s across e5er "lator:$
.o ar 3e@re 5er encourage b te reacton ro: e5elo"ers$ +"" ;nks& our
ne3 :eto o ee" lnkng to s"ecAc content n an a"" s no3 beng use
b 100s o a""s across O.& +nro an 6no3s "one& 3t lnks to :ore
tan 1 bllon n5ual estnatons n tese a""s$ 6e also launce our
+uence et3ork& our Arst bg e>ort to el" e5elo"ers :onet=e on :oblean 3e@5e rece5e a lot o nterest ro: e5elo"ers$ 6e@re rollng out te
+uence et3ork grauall$ 6e@re gong to contnue to ra:" ts a"" o5er
te co:ng :onts an are eGcte b te o""ortuntes aea$
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8/9/2019 Facebook Earnings
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Fnall& let@s talk about our e>orts to bul te kno3lege econo:$ !s as
been a strong "ero or us& an 3e@5e reace so:e ne3 :lestones n te
busness$ o3 :ore tan %0 :llon s:all busnesses use Facebook "ages to
connect 3t ter custo:ers an :ore tan 1$ :llon o te: are act5e
:arketers on Facebook$ !o contnue el5erng te best returns or
:arketers& 3e@5e been 5er ocuse on :"ro5ng te ?ualt o te a
eG"erences or our co::unt$ Our goal ere s to :ake as as nterestng
an useul as our ren@s content on Facebook$ 6e@re n5estng ea5l n
ts area$ ,n ts ?uarter 3e launce a nu:ber o e>orts to :"ro5e te
?ualt an rele5ance o our as& nclung our ne3 as "reerences tool&
nterest base a5ertsng an :"ro5e:ents to e3s Fee esgn to reuce
lo3 ?ualt content$
,n so:e countres our sur5es ncate tat our as are gettng close to te
?ualt le5el o organc content$ But n :ost e5elo"e countres 3e stll
a5e lot to o$ 6e eG"ect to contnue to ocusng on ts or a long t:e$
.o tat@s : u"ate on o3 3e@5e been eGecutng o5er te last ?uarter$ ,t@s
been a ?uarter 3t goo "eror:ance an contnue :o:entu:$ .o , 3ant
to tank e5erone 3o 3orks 3t Facebook an s "art o our co::unt&
nclung our sareolers an "artners$ Because o our e>orts& 3e@re
contnung to :ake "rogress to3ars our :sson to el" connect te 3orl&
an 3e@re :"ro5ng 100s o :llons o "eo"les@ l5es e5er a$ , a:
grateul or our su""ort an to a5e te cance to 3ork 3t all o ou$
!anks an no3 ere's .erl$
Sheryl Sandberg
!anks Mark an e5erone$ +s Mark sa& 3e a a strong secon ?uarter$
+ re5enue gre3 ID ear-o5er-ear to :ore tan 2$ bllon$ Moble a
re5enue gre3 11D ear-o5er-ear an tat :akes u" 2D o our a
re5enue$ 6e contnue to ocus on tree ke areas n n5est:entJ ca"tal=ng
on te st to :obleJ gro3ng te nu:ber o :arketers usng FacebookJ an
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8/9/2019 Facebook Earnings
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bulng our a "roucts$ !ese n5est:ents contnue to generate broa
base gro3t$
+ll geogra"es an all :arketer seg:ents "eror:e 3ell ts ?uarter$ Our
tea: as a reall strong bele n 3at 3e@re bulngJ te 3orl@s Arst a
"lator: tat el5ers "ersonal=e :arketng at scale$ 6le 3e bele5e t@s
stll earl as& 3e@re "lease 3t te "rogress 3e@re :akng an , 3ant to
on Mark n congratulatng our global tea:s on ter contnue eGecuton$
!oa ,': gong to ocus on t3o o our ke :arketer seg:entsJ s:all
busness an bran :arketers& as 3ell as co5er so:e o te n5est:ents
3e@re :akng on te "roucts n a-tec ront$ 6e bele5e tat "ersonal=e
:arketng o scale can r5ers else or all t"es o :arketers$ #ust a e33eeks ago& , 3as n ,na an , oste our Arst ,na .MB rountable$ One o
te entre"reneurs , :et& H5ek rabakar bult s ouse ust a e3 ears ago
to rase te :one to start s an s 3e@s rea: busness Cu:bak& a
co:"an tat :akes ,na ,ns"re "roucts$ Facebook s Cu:bak@s leang
:arketng cannel an s res"onsble or %D o onlne re5enue an %D o
ter 6eb ste traKc$ !er Facebook as el5er a G return on a5ertsng
s"en an as el"e co:"an gro3 to :ore tan 10 e:"loees n tree
oKces$
6e a5e :ore tan %0 :llon act5e s:all busness "ages& an o5er 1
:llon o tese are act5e on :oble$ 6e tnk 3e a5e a bg o""ortunt to
el" .MBs lke Cu:bak gro3 ter busnesses& an ,': "lease to announce
toa tat 3e a5e o5er 1$ :llon act5e a5ertsers$ 6e@re also ra:"ng
u" our engage:ent 3t ts co::unt$ ,n te 7$.$& 3e@re ostng Facebook
Ft 3orkso"s n ctes lke e3 Lork& Ccago an Ma: to el" s:all
busnesses$ +n 3e@re ong ts globall& nclung or:ng our ArstEuro"ean .MB ca"$
6e@re also :akng great stres n our 3ork 3t our larger brans to
ncreasngl recogn=e o3 our scale& targetng an :easure:ent
ca"abltes can r5e great results$ For eGa:"le& 9 an 9llette 3orke
I
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8/9/2019 Facebook Earnings
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3t us an agences ,H. an Meaco: to launc ts Hector ,,, ra=or to :en
n ,na$ 0D o te 100 :llon Facebook users n ,na are on :oble an a
:aort o tese are usng eature "ones$ !s 3as our Arst eature "one
onl Facebook ca:"agn$ ,t reace 0D o 9llette's target auence an
generate sgnAcant lt n bot :essage an a recall$
+s 3e 3ork 3t bran :arketers aroun te 3orl& 3e ocus on o3 te
can le5erage our tecnolog "lator: to bul ter brans to create a stor
tellng$ 6e sa3 :an great eGa:"les o ts& at te recent onlne est5al$ 6e
3ere eGcte tat ca:"agns tat :ake Facebook a ke "art o ter e>ort
took o:e "restgous a3ars$
!e 6orl Cu" also "ro5e a great o""ortunt or bran bulng onFacebook$ Facebook 3as an :"ortant "art o ts global e5ent 3t %0
:llon "eo"le onng a con5ersaton& generatng % bllon nteractons$ !e
Anal 3as te sngle :ost talke about s"ortng e5ent n Facebook stor&
generatng 20 :llon nteractons ro: :llon "eo"le$
Brans suc as /esel& ke& For an Mc/onals ca"tal=e on ts global
con5ersaton$ Mc/onals 3orke 3t agences& OM/& Fra:estore& an +RC
s"onsors"& as 3ell as Facebook's Creat5e .o" to "rouce %0 5eos tatuse renc res as "laers$ FrFutbol recreate te :ost s"ectacular 6orl
Cu" :o:ents an ran te: as 5eos te 5er neGt a 3t te renc res
actng as te "laers$ !s ca:"agn reace 12 :llon "eo"le n 1
countres$
6e also re:an co::tte to n5estng n "rouct e5elo":ent to r5e
ger returns or all o our :arketers$ Our custo: auence's ca"abltes&
3c enable better targetng are been ao"te ?uckl an are no3 been
use b 1 + +ge 100$ Earler ts ear& 3e launce 3ebste Custo:
+uences& 3c enable :arketers to target recent 5stors to ter
3ebstes$ !s s lkel targetng but t@s e5en :ore e>ect5e because t 3orks
across bot 3eb an :oble$ 6e're "lease 3t te earl reacton ro:
:arketers$
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8/9/2019 Facebook Earnings
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6e also ntrouce "re:u: auto"la 5eo as ts ear$ Heo on Facebook
el"s brans eGten ter !H n5est:ents b co:bnng tratonal reac
ocus ca:"agns 3t our un"arallele targetng abltes$ !oa& 3e run
about a o=en ca:"agns an te earl ata so3 "ro:sng results$ 6e@ll
contnue to roll ts "rouct out slo3l an careull$ .:larl 3e@re seeng
"ost5e earl e:an or :arketers or as on ,nstagra: an 3e@re rollng
tese as outs careull as 3ell$
,n all o ts 3e re:ane ocuse on te transton to :oble$ Our recentl
launce auence net3ork lets a5ertsers use Facebook targetng 3le
eGtenng ter ca:"agn beon Facebook$ !s can :"ro5e te rele5ance
o a "eo"les see bot on an o> Facebook an 3e@re encourage b te
earl res"onse$
Fnall& earler ts su::er 3e announce te ac?uston o ;5eRal& a
leang onlne 5eo a5ertsng "lator: tat enables custo:ers lke
M;B$co: an +E et3orks to :onet=e ter 5eo n5entor eKcentl$ 6e
a5e a lot to o ere& but 3t ;5eRal 3e@re n5estng n tools tat can
:"ro5e te rele5ance o 5eo as across te 3eb$
,n su::ar& 3e@re "lease 3t our "eror:ance an te "rogress 3e@re:akng$ 6e're te Arst "lator: tat can el5er "ersonal=e :arketng at
scale an :arketers are ncreasngl recogn=ng to great result so 3e can
r5e or te:$ .tang ocuse an eGecutng 3ll re:an a :aor tng or
us :o5ng or3ar$ Our tea:s kno3 tat our uture success e"ens u"on
our contnue ac?uston an our "lan s to sta ocuse$
!anks$ +n no3 ere s /a5e$
Dave ehner
!anks& .erl$ +n goo aternoon e5erone$ Q2 3as a goo ?uarter or us
across our ke o"eratng an Anancal :etrcs$ 6e generate strong re5enue
gro3t n o"eratng :argns an el5ere NI2 :llon o ree cas o3 an
3e contnue to :ake n5est:ents to r5e our core busness& as 3ell as to
su""ort our long ter: strategc "rortes$
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8/9/2019 Facebook Earnings
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;et@s start 3t a re5e3 o our net3ork$ 6e are eGecutng 3ell on our
ongong :sson to connect e5erone$ 2 :llon "eo"le use Facebook on an
a5erage a n #une& u" 1%0 :llon ro: a ear ago$ !s re"resents %D o
te 1$%2 bllon "eo"le 3o use Facebook urng #une$
Moble contnues to be a strong r5er o our gro3t 3t o5er 1 bllon
"eo"le usng Facebook :ontl on :oble$ +t te sa:e t:e 3e@re enablng
:ore 3as or "eo"le to connect an sare beon te core Facebook a""$
For nstance& bot ,nstagra: an Messenger a5e eac "asse o5er 200
:llon M+7 an contnue to gro3 ncel$
!urnng no3 to te Anancals& total re5enue n te secon ?uarter 3as 2$
bllon u" 1D or D on a constant currenc bass$ !otal a re5enue 3asN2$I bllon& u" ID or D on a constant currenc bass$ + re5enue gro3t
3as strong aroun te 3orl 3t eac o our our geogra"c regons
gro3ng b o5er 0D$ Moble a re5enue 3as a""roG:atel 1$ bllon or
2D o a re5enue& co:"are to a""roG:atel N0 :llon or 41D o a
re5enue last ear$
/eskto" a re5enue 3as u" D ear-o5er-ear$ ,n Q2& te a5erage a>ect5e
"rce "er a ncrease 12%D co:"are to last ear& 3le total a:"ressons eclne 2D$ !e ecrease n a :"ressons contnues to be
r5en b te st to3ars :oble usage 3ere "eo"le are so3n e3er as
co:"are to eskto"$
!e ncrease n te a5erage "rce "er a 3as "r:arl r5en b an ncrease
n te "ercentage o our as beng ser5e n e3s Fee$ !e "rce 5olu:e
trens 3ere generall consstent across all our re"orte geogra"c regons$
!otal "a:ents an oter ees re5enue 3as N2%4 :llon u" D 5ersus last
ear$ +s 3e a5e note n te "ast 3e bele5e te :ore :eanngul
co:"arson tat better reects te organc gro3t rate o te "a:ents
busness& co:es ro: lookng at "a:ents 5olu:e ro: ga:es s"ecAcall&
3c 3as u" 1D n Q2 5ersus last ear$
10
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Our current ga:es "a:ent re5enue co:es entrel ro: eskto" usage an
3e are seeng eclnes n te nu:ber o "eo"le usng Facebook on eskto"& a
tren tat 3ll :ake gro3ng ts busness callengng gong or3ar$
!urnng to eG"enses& our Q2 9++ eG"enses 3ere N1$ bllon& u" 22D& an
our non-9++ eG"enses 3ere N1$2 bllon& u" 1D$ ote tat cost o re5enue
gre3 2D on a 9++ bass an 1D on a non-9++ bass& :anl r5en b
unusuall g eG"enses n 201% relate to te transton out o certan
lease ata centers$ !s atness n cost o re5enue 3as te "r:ar reason
o5erall eG"enses gre3 relat5el slo3l$
O"eratng eG"enses eGclung cost o re5enue gre3 %%D on a 9++ bass
an %1D on a non-9++ bass$ 6e ene Q2 3t I1 e:"loees& u" %Dro: last ear$ Our Q2 9++ o"eratng nco:e 3as N1$4 bllon& re"resentng
a 4D o"eratng :argn& u" ro: %1D last ear an our non-9++ o"eratng
nco:e 3as N1$I bllon& re"resentng a D non-9++ o"eratng :argn& u"
ro: 44D last ear$ Our 9++ an non-9++ taG rates 3ere 4%D an %D&
res"ect5el$ 9++ net nco:e 3as NI1 :llon or N0$%0 "er sare& an non-
9++ net nco:e 3as N1$1 bllon or N0$42 "er sare$
,n Q2& 3e s"ent N4 :llon on Ca"EG an generate NI2 :llon o reecas o3$ 6e ene Q2 3t a""roG:atel N14 bllon n cas an
n5est:ents$ !s eGclues te :"act o te Oculus ac?uston 3c 3as
close earler ts 3eek an nclue a: a""roG:atel N400 :llon cas
"a:ent$
o3 lookng or3ar& let :e start b notng tat te or3ar-lookng
co::ents ,@ll sare toa or 2014 nclue te :"act ro: te recentl
close ac?uston o Oculus& but eGclue eGce"t 3ere oter3se note te
:"act ro: 6ats+"" 3c 3e contnue to eG"ect 3ll close later ts ear$
,n ter:s o eG"enses& 3e eG"ect tat our total 2014 9++ eG"enses&
nclung cost o re5enue an stock co:"ensaton& 3ll lkel gro3 n te
negboroo o %0D to %D& an tat our non-9++ eG"enses& nclung
11
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cost o re5enue but eGclung stock co:"ensaton& 3ll gro3 at a s:lar rate$
!ese rates are slgtl lo3er tan our "ror eG"ectatons ue to te
eKcences n areas lke cost o re5enue an 9+$
8o3e5er& 3e bele5e tat 3e are stll n te earl as o bulng out all o
te ser5ces to :aG:=e Facebook@s :"act on te 3orl an 3e nten to
contnue to n5est aggress5el n "eo"le& "roucts an nrastructure n te
secon al o 2014 an beon$ !oug t s "re:ature to g5e a s"ecAc
outlook or 201 eG"enses& , 3ante to note tat 3e eG"ect sgnAcant stock-
base co:"ensaton an a:ort=aton eG"enses& as 3ell as substantal
ncre:ental o"eratng costs relate to te ac?ustons o Oculus an
6ats+""$ !s 3ll a to our o5erall eG"enses n 201 an subse?uent
"eros$ !ese costs 3ll be ncre:ental to core Facebook eG"enses& 3c
3ll contnue to gro3 sgnAcantl n 201 as 3e ra:" n5est:ents n "eo"le&
"roucts an nrastructure$
For taGes& 3e eG"ect 9++ an non-9++ rates or te rest o 2014 to be
s:lar to our Q2 rates& altoug tese coul 5ar 3el e"enng on our
nternatonal re5enue an eG"ense :G& an oter actors& :ost notabl te
:"act ro: ac?ustons& nclung te eG"ecte closng o 6ats+"" later
ts ear$ 6e contnue to antc"ate tat 2014 Ca"EG 3ll be a""roG:atel
N2 bllon to N2$ bllon$ 6e eG"ect sares outstanng to gro3 ro: aroun
2$ bllon at te en o 201% to a""roG:atel 2$ bllon at te en o 2014&
agan assu:ng 6ats+"" closes b te en o te ear$
!urnng last to re5enue$ +s 3e sa3 n Q2& our ear-o5er-ear gro3t rate
eclne ro: I2D n Q1 to 1D n Q2 or D on a constant currenc bass$
!s s consstent 3t our co::ents on te Q1 call 3en 3e ncate tat
o5er te course o 2014& te ear-o5er-ear gro3t rates n re5enue 3ouleclne :eanngull as te co:"s beca:e :ore Kcult$ 6e eG"ect ts
tren to contnue o5er te course o te secon al o te ear$
6le 3e are eGcte about te long-ter: "otental o our a"" ntat5es lke
,nstagra:& auto"la 5eo& an te +uence et3ork& 3e are stll n te
12
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8/9/2019 Facebook Earnings
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earl as o bulng tese busnesses an eG"ect ter re5enue
contrbuton to re:an s:all n te near ter:$ 6e re:an o"t:stc as e5er
about te long-ter: o""ortunt to gro3 re5enue b :"ro5ng te ?ualt
an rele5ance o our as an ncreasng te 5alue 3e brng to :arketers
troug our "roucts& tools an tecnologes$
,n su::ar& 3e're 5er "lease 3t our o5erall "eror:ance n Q2 an n
"artcular te contnue gro3t o our :oble auence& te strengt o our
as busness an te n5est:ents 3e're :akng to bul long-ter:
sareoler 5alue$
6t tat& #a& let@s o"en u" te call or ?uestons
!uestion"and"Answer Session
Operator
6e 3ll no3 o"en te lne or a ?ueston-an-ans3er sesson$ (O"erator
,nstructons) Lour Arst ?ueston co:es ro: te lne o Erc .eran 3t
7B.$ lease go aea$
Deborah Crawford
lease go to neGt ?ueston$
Operator
eGt 3e a5e 8eater Belln 3t 9ol:an .acs$ lease go aea$ 6e a5e
our ?ueston ro: Erc .eran$ Lour lne s o"en$ lease go aea$
Eric Sheridan- 7B.
.orr about tat$ , on@t kno3 ou ear te ?ueston$ But .erl& one on
sort o +uence et3ork an ;5eRal$ Mabe ou can g5e us a lttle better
sense o te e"t o te con5ersatons 3t a5ertsers an 3at tat :gt
o to te "lator: longer ter: 2014 an beon n ter:s o broaenng out
Facebook@s a5ertsng e>ortP +n secon ?ueston /a5e& on te Oculus an
6ats+""& s tere an 3a to get a sense o e:"loee counts at te
co:"anes or te "ressure tat 3e :gt see ro: O"EG gong or3arP
!anks$
1%
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8/9/2019 Facebook Earnings
14/33
Sheryl Sandberg
.o ,@ll start$ One o te goals 3e a5e& 3e talk about n all o tese calls s to
:ake as :ore rele5ant or "eo"le an :arketers& an ncreasngl 3t te
+uence et3ork 3e a5e a goal to o tat or "ublsers as 3ell$ Heo s
reall :"ortant$ ,t@s one o te astest gro3ng a :eu:s out tere n bot
eskto" an :oble$ .o ;5eRal as a leang onlne 5eo a5ertsng
"lator: an 3e tnk 3e can use t to e>ect5el eG"an 5eo as to
:arketers an to "ublsers outse o Facebook an o>er greater auence
reac an ablt to nscernble 5eo a5ertsers$
6en ou look at te +uence et3ork& 3e@re stll n reall earl as an
3e onl a5e so:e "ublsers n our net3ork$ But 3e see ts as an
o""ortunt to "ro5e greater reac or Facebook :arketers an e5elo"ers$
+gan& to :"ro5e te rele5ance o te as "eo"le see bot on an o>
Facebook$
Dave ehner
!anks Erc$ On Oculus an 6ats+""& 3e@re n -- 5er :uc n n5est:ent
:oe on our o5erall busness an 3e eG"ect to contnue to ra:"
n5est:ents n te core busness troug 201$ +n lke , sa& 3e@ll be
laerng on to" o tat costs relate to Oculus an 6ats+""$ But 3e@re notgettng nto :ore s"ecAcs on te eGact eacounts on tose$ But 3e bele5e
tose are sgnAcant o""ortuntes n te long run an so 3e@re gong to be
n5estng aggress5el accorngl$
Operator
Lour neGt ?ueston co:es ro: 8eater Belln 3t 9ol:an .acs$ Lour lne
s o"en$
#eather $ellini- 9ol:an .acs!3o ?uck ?uestons ro: :e$ Frst 3oul ust be& ou coul sare 3t us
an ?ualtat5e co::entar about te breat o :oble a re5enue$ !ere
s al3as a lot o ebate back an ort about o3 bg :oble a"" nstalls
are$ +n tere s antng ou coul sare 3t us about te breat o
tese -- te breat o :oble as kn o been cangng o5er te last ear
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8/9/2019 Facebook Earnings
15/33
or soP +n ten te ollo3 u" ?ueston 3oul ust be relate toJ o3 our
con5ersatons 3t a5ertsers are cangng as "eo"le start to tnk
collect5el about ter !H an 5eo buget togeter$ ,': ust 3onerng
ou@re startng to see our con5ersatons 3t bg !H a5ertsers start to
cange so:e3at o5er te last sG :onts or soP !ank ou$
Sheryl Sandberg
.o 3en ou tnk about our :oble as& an ,': reall gla ou aske ts
?ueston$ , o tnk so:et:es "eo"le tnk tat :oble a"" nstall as are
all o te re5enue or a great :aort o re5enue an te@re not$ !e@re
onl "art o te :oble as re5enue$ Our :oble as re5enue s "rett& t@s
broa base$ 6e a5e large bran a5ertsers& s:all .MBs& rect res"onse
a5ertsers as 3ell as e5elo"ers usng our :oble as$ !e :oble a""
nstall as& 3c are run not onl b e5elo"ers but also b large co:"anes
tat 3ant to get "eo"le to nstall a""s are gro3ng$ !e re:an a goo "art
o our :oble as re5enue an 3e@re eGcte about te o""ortuntes tere$
But 3e see our o""ortuntes n :oble as as :uc broaer tan ust
nstallng a""s$
.o te secon ?ueston& , o tnk one o te tngs tat@s a""ene n te
last reall ear& ear an a al on Facebook& s "eo"le unerstanng o3strong te creat5e o""ortunt s$ 6e@5e bult out te tecnolog "lator:
an :ae our "rouct n5est:ents an 3e@re reall create "artcularl 3t
te :o5e to :oble an our as on e3s Fee& an o""ortunt to o great
creat5e stor tellng$ + great recent eGa:"le s te "rogress5e bab as
ou@5e seen te:$ !e@re reall engagng an reall un& but te@re :akng
a reall :"ortant "ont& 3c s "eo"le soul be bung ter o3n
nsurance& but te ablt or te: to o tat a s base on te tecnolog
3e create an also te great 3ork te@5e one 3t +rnol 6orl3e&
ter agenc on te creat5e "art$
+n so , tnk or a long t:e "eo"le a5e tougt !H 3s"er creat5e
stortellng an onlne as 3ork or :ore targete teGt base results$ +n ,
tnk 3e@re seeng tat cange& 3c :eans tat te 3a "eo"le a""roac
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8/9/2019 Facebook Earnings
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!H& te@ll also a""roac Facebook an are startng to& 3c :akes tose
bugets 3ork :uc better togeter$
Operator
Lour neGt ?ueston co:es ro: te lne o /ouglas +n:ut 3t #Morgan$
Lour lne s o"en$
Douglas An%uth- #Morgan
!3o tngs , 3ante to ask$ Frst Mark as been talkng -- t 3as on our blog
about testng a bu button 3tn te "lator:$ .o , 3as o"ng ou coul
talk about o3 :"ortant ou tnk co::erce s to Facebook gong or3ar
an ten "era"s also "a:ents as 3ell$ +n ten seconl .erl& ou
:entone so:e o te :aor brans tat a5ertse urng te 6orl Cu"$/o ou talk about o3 ou get te ollo3 troug ro: tose brans& no3
tat tat :aor e5ent as "asse an o3 ou kee" tose a ollars on
FacebookP !anks$
Sheryl Sandberg
.o& on te bu button& 3e launce a s:all test n te 7$.$ onl& 3c
enables "eo"le to t a bu button an on "ages or n "age "ost as on
Facebook$ ,t strea:lnes te "rocess o bung ro: our clents$ o one s
bung ro: us$ 6e@re ust strea:lnng te "rocess o bung ro: our
clents$ , tnk co::erce s reall :"ortant an s a gro3ng :"ortant "art
o our busness as all :arketer seg:ents are gro3ng$ But , on@t tnk
"eo"le soul conuse tat 3t Facebook sellng tngs rectl$ !e :ore
"eo"le bu onlne& te :ore "eo"le bu tngs te sco5er troug ter
:oble "ones& te :ore "eo"le sco5er tngs ro: a e3s Fee an go on
to "urcase& te :ore :"ortant 3e are n r5ng e-co::erce an , tnk
3e are ncreasngl :"ortant$ !at oesn@t :ean 3e@re gong to or a5e to
sell "roucts$
Mark Zuckerberg
Les& an ,' ust a to tat because so:e o te ?ueston 3as about
"a:ents tat 3e 3ll clearl o 3ork n "a:ents to acce"t "a:ents or
a5ertsng an on "lator: an oter tngs tat 3e o$ But ust because 3e
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8/9/2019 Facebook Earnings
17/33
3ll o tat& t oesn@t -- 3e stll bascall 5e3 oursel5es as a "artner to oter
co:"anes n te "a:ent s"ace rater tan trng to co:"ete rectl or
tat$ Our :an busness s a5ertsng an , tnk 3e're :ostl& to te eGtent
tat 3e o "a:ents& t@s gong to be su""ort5e to tat$ , 3ante to :ake
one :ore "ont& ust relate to tat because , tnk so:e o te ?uestons
aroun "a:ents are connecte to 3at 3e@re "lannng on ong n te oter
a""s outse o Facebook$ .o tngs lke Messenger an 6ats+"" o5er t:e&
3en tat closes an ,nstagra:& , reall o ust 3ant to e:"as=e tat tere
s a lot o 3ork to set u" te ounaton or a5ng a goo busness
co::unt an ecosste: an n tose tat 3e tnk t@s gong to be ears
o 3ork beore tose are uge busnesses or us$ +n ,': lkng 3ere 3e are
no3 on so:etng lke te Messenger& to 3ere 3e 3ere on Facebook n lke200 or 200I& 3ere t 3as "r:arl consu:er "rouct at tat t:e 3ere
ou reall onl co::uncate 3t rens$
+n a bunc o "eo"le aske us& an sa tat 3e soul "ut as$ But beore
3e tat 3e 3ante to create reall goo organc consu:er eG"erences
or "eo"le to nteract 3t >erent enttes$ .o 3e create ages& so "eo"le
coul nteract 3t organc busnesses$ +n ten n orer to :ake t so tat
busnesses an "ublc Agures an olks 3oul create "ages& 3e o>ere
,nsgts on >erent "roucts$ +n 3e ga5e all tose tngs a3a or ree$
ages 3ere ree an contnue to be ree an tat@s "artall 3 3e a5e %0
:llon busnesses toa& usng ages on te "lator:& an ,nsgts& 3e kn
o g5e a3a or ree n orer to enable :ore olks to use ages$
!en onl ater 3e a a goo kn o organc nteracton tat "eo"le coul
an 3oul 3ant to nteract 3t tese >erent busnesses an enttesJ tat
3e reall laer as on to" o tat an start to bul te busness tat 3e
a5e toa$ .o , ust tnk t s 3ort e:"as=ng ts because 3e@5e sa n
a nu:ber o co::ents tat 3e tnk tat so:e o tese ne3er ntat5es are
gong to ra:" o5er t:e$ 6e reall o :ean tat$ +n 3e are serous about
ong ts te rgt 3a an bulng u" ne3 ecosste:s an , tnk tat@s
or so:e o tese a""s& 3e@re ust kn o bul all te nrastructure tat 3e
1I
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8/9/2019 Facebook Earnings
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nee to :ake t be so:etng tat's scalable o5er t:e& rater tan trng to
a5e ts be an :"act tat ou 3ll notce n te neGt& , on@t kno3& sort-
ter: "ero o t:e$
Sheryl Sandberg!o te 6orl Cu" "art o our ?uestonJ brans certanl use te 6orl Cu"
an bg e5ents lke ts to launc tngs as te contnue to as a ca:"agn$
!e also a5e oter bg e5ents tat co:e along as 3ell as ter o3n e5ents
aroun "rouct launces$ +n so 3e tnk& ob5ousl not e5er a s a 6orl
Cu"& but tere are lots o o""ortuntes trougout te ear an troug te
"rouct ccle to 3ork 3t bran a5ertsers n bg 3as$
OperatorLour neGt ?ueston co:es ro: Ross .anler 3t /eutsce Bank$ Lour lne s
o"en$
&oss Sandler- /eutsce Bank
, a5e one ?ueston or Mark on te "rouct se an ten one or /a5e$
Mark& so +"" ;nks ust launce& ou go out a e3 ears& o3 :uc o
ou tnk so:etng lke ee" lnkng coul ncrease engage:ent or a
e>ect5eness or Facebook an or tose 1 bllon lnks tat ou a5e u" an
runnng alrea& 3at are ou seeng n tose earl testsP +n ten /a5e& 3e
kno3 ou on@t breakout te "rce 5ersus 5olu:e :etrcs or Moble& but ust
rectonall coul ou g5e us so:e color on o3 te a-:"resson gro3t
n :oble co:"ares 3t te %1D B+7 gro3t n :oble$
Mark Zuckerberg
.ure& so , on@t a5e :uc color tat@s useul to sare ere on +"" ;nks$ ,t's
stll earl$ eo"le a5e :arke u" a bunc o a""s 3t ts :etaata& tat
allo3s us to searc or t& but .earc or Facebook s gong to be a :ultear5oage an tere s ust so :uc content tat s un?ue to te Facebook
ecosste: tat 3e can ans3er ?uestons or ou tat reall no oter ser5ce
can$ #ust lke te oter a , 3as curous about Anng out 3c o one o
: ren@s ren& lke at a co:"an$ +n t@s lke , on@t kno3 an oter
ser5ce 3ere ou can ust go o tat ?uer but on Facebook ou can an
1
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8/9/2019 Facebook Earnings
19/33
te secret to ts s gong to be bascall ust o5er a long "ero o t:e
neGng all o te >erent content tat's on Facebook n e5er >erent 3a$
.o 3e starte o> 3t "eo"le$ !ere's ob5ousl a nee to be able to An
"eo"le n orer to use te "rouct an a rens an ust a5e our core
kn o ecosste: 3ork but 3e're neGng :ore nto connectons an no3
3e're gettng nto :ore o te content an t's a uge a:ount o contents$ ,
tnk tere 3as :ore tan a trllon "osts& 3c so:e o te searc
engneers on te tea: lke to re:n :e s bgger tan an 3eb searc
cor"us tat@s out tere$ But tat@s ust kn o one "art o te ata& an 3e@re
gong to kee" on ong :ore an :ore$ 6e're gong to start o ocusng on
stu> tat@s un?ue to Facebook& tat ou couln@t reall ans3er tose
?uestons else3ere$
+"" ;nks b eAnton o beng outse o Facebook are not gong to be
un?ue to Facebook$ .o 3e'll get to tat o5ert:e$ , tnk t 3ll be a 5aluable
"art o te ecosste:$ But onestl 3e're :ostl ntereste n tat to enable
5alue or oter e5elo"ers an "usng strbuton to te: tan 3e are or
our o3n searc$ ,t@s gong to enable nterestng 3as or a e5elo"er to be
able to :ake a set o "eo"le n ter a""& can sare content on Facebook an
ten lnk rectl to te rgt "art o te a""& an enable so:e engage:ent
as$ .o tat 3a a e5elo"er can sa a "erson 3as usng : a"" an te
3ere gong to bu so:etng but te ro""e out o te ceckout o3$ .o
3e@re gong to a5e an a tat el"s te: lnk rgt back to te ceckout
o3& so tat te can co:"lete ter con5erson$ +n ou 3ant ee" lnkng
to be able to enable tngs lke tat but t@s gong to take a 3le or t to "la
out 3t searc$
Dave ehnerLes& an Ross on our ?ueston on :oble as$ Moble B+7 s ra:"ng ncel&
%D gro3t an 3e@re seeng t gro3 ncel across all o our geogra"c
regons$ O course :oble as are ra:"ng as 3ell$ ,n ter:s o "rcng 3e
on@t break t out but on te re"orte "rcng tren& as , 3as& as , tnk ,
:ae clear& te 12%D ncrease n "rce 3as r5en b a :G st 3t a
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8/9/2019 Facebook Earnings
20/33
ger "ercentage o e3s Fee as$ +n ne3 ee as are reall e>ect5e
or :arketers an tat nclues :oble e3s Fee as as 3ell$ !e el5er a
lot o 5alue or :arketers$ !at@s 3 te@re gettng a ger "rce n te
aucton& because te "rce o as reall correlates to te 5alue tat te
create$ +n 3e contnue to ocus on :akng tose a unts better an better&
:ore rele5ant an targete or te "eo"le 3o use Facebook as 3ell as or
:arketers$ +n 3e@re seeng goo results$ Marketers are gettng goo RO,
an te@re co:ng back an s"enng :ore 3t us$ .o 3e@re "lease about
all o tat$
Operator
Lour neGt ?ueston co:es ro: #ustn ost 3t Merrll ;nc$ Lour lne s
o"en$
'ustin (ost- Merrll ;nc
,@ lke to ollo3 u" a lttle bt on te a "rcng& ob5ousl u" 122D$ .erl
:abe ou can co::ent a lttle bt about te organc gro3t or lke or as
tereP +n o ou see o""ortuntes to contnue to see nce "rcng gro3t as
ou look out te neGt cou"le o earsP +n ten as ou tnk about te ne3
a or:ats& 5eo an oter tngs& 3oul ou tnk tat coul contnue to
r5e "rcng ger& :eanng ne3 a or:ats coul r5e e5en :ore 5aluetan te eGstng as tat ou a5e on FacebookP !ank ou$
Dave ehner
#ustn& ts /a5e$ #ust ollo3ng u" on tat& n ter:s o te "rcng as , sa& t@s
reall about te :G st to3ars te e3s Fee as s 3at@s r5ng te
o5erall re"orte "rcng trens but 3e are ocuse on :akng our as all
better an r5ng better returns or our :arketers$ +n 3e see tat reecte
n te "rce$ !ere's oter tngs& or nstance$ 6e@re :akng our rgt an
colu:n as :ore e>ect5e b cangng te or:at o tose$ !ose 3ll be
ger 5alue to our :arketers because te@ll r5e :ore engage:ent$ +n t
3ll -- but tere@ll be e3er o te:$ .o tat 3ll :"act "rcng$
But e5ertng tat 3e@re ong s about trng to r5e :ore 5alue or our
:arketers& as 3ell as trng to r5e :ore rele5ant a eG"erences or te
20
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8/9/2019 Facebook Earnings
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"eo"le 3o use Facebook$ +n 3e@re successul n ong tat& 3e@ll r5e
RO, or te :arketers& 3e@ll r5e goo eG"erences an 3e@ll get goo
"rcng$
Operator
Lour neGt ?ueston co:es ro: Mark Maane 3t RBC Ca"tal Markets$ Lour
lne s o"en$
Mark Mahaney- RBC Ca"tal Markets
!anks$ !3o ?uestons "lease$ +ntng ou coul sare 3t us 3t regars
to Cna an e>orts to e5elo" :ore o a "resence tereP +n ten :abe a
ollo3 u" ?ueston on /a5 Marcus co:ng o5er an so:ebo 3t a uge
"a:ents backgroun runnng te Messagng "rouct& t@s kn o lke rng-- sgnng Mess u" to te Ma: 8eat& lke t@s lttle o an o transton$ +re
3e lookng at t 3rongP ,s tere an "artcular reason 3 e 3ouln@t be
:ore ocuse on "a:entsP !ank ou$
Sheryl Sandberg
.o ,@ll talk about Cna$ Our :sson s to enable e5erone n te 3orl to
sare an connect$ +n so& 3e@5e been stung an learnng about Cna
or a nu:ber o ears an 3e re:an 5er ntereste$ 6e are seeng Cnese
base co:"anes use Facebook to reac te global auence an 3e are --
3e tnk 3e a5e an :"ortant o""ortunt ust 3t ter eG"ort :arket an
3e@re ocuse on tat or no3$
Mark Zuckerberg
Les& an , :ean on :essenger an /a5& , tnk e s ust a real talente
"rouct generalst$ 8e's one a nu:ber o >erent tngs& nclung n s
"ast e ran an bult a :essagng co:"an$ Most recentl clearl e ran a
5er :"ortant co:"an an , tnk 3as "rett successul n el"ng getreall goo results tere$ Messenger 3ll a5e -- o5er t:e tere 3ll be so:e
o5erla" bet3een tat an "a:ents$ But , guess 3at ,': ust trng to sa s
t3o tngs$ One s& te "a:ents "ece 3ll be a "art o 3at 3ll el" r5e
te o5erall success an el" "eo"le sare 3t eac oter an nteract 3t
21
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busnesses$ But 3e@re reall ocuse on te nteractons o5erall& rater tan
te :ecans: an /a5 sares tat 5e3$
+n te secon tng s ust tat tere's so :uc groun 3ork tat 3e nee
to o n orer to :ake t so tat "eo"le are co::uncatng 3t busnesses
an "ublc Agures an enttes n tese oter a""s tat 3e@re bulng& 3c
s "art o te busness ecosste:$ +n , reall can@t unerscore tat enoug
tat 3e a5e a lot o 3ork to o an 3e coul take te cea" an eas
a""roac an ust tr to "ut as n or o "a:ents an :ake so:e :one n
te sort ter:$ But 3e@re not gong to o tat$ .o to te eGtent tat an o
our :oels or antng reects tat 3e :gt be ong tat& , 3oul
strongl encourage ou ereon to ust tat& because 3e@re not gong to an
3e@re gong to take t:e to o ts n te 3a tat 3e tnk tat@s gong to be
rgt o5er :ult"le ears$
Operator
Lour neGt ?ueston co:es ro: +r5n Bata 3t .terne +gee$ Lour lne s
o"en$
Arvind $hatia- .terne +gee
#ust a ?uck ?ueston on 6ats+""$ , real=e t asn@t close et$ But can
ou g5e us an ncatons to us on kn o te user trens an engage:ent&
et ceteraP .erl ou :entone ,na 3ere 3e see a lot o usage co:ng
out o tere or 6ats+"" n "artcularP
Dave ehner
o& te eal asn@t close$ 6e a5e notng to sa$
Operator
Our neGt ?ueston co:es ro: el /os 3t CR! Ca"tal$ Lour lne s o"en$
)eil Doshi- CR! Ca"tal
.erl& , tnk attrbuton t coul be a 5er bg o""ortunt& es"ecall or
local busnesses to el" te: real=e RO,s$ eo"le gong ro: onlne to
oSne$ 6t %0 :llon busnesses no3 on Facebook& o3 are ou el"ng
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tose busnesses real=e te onlne to oSne con5ersaton to Facebook& to
r5e :ore ollars gong to local busnessesP !anks$
Sheryl Sandberg
, agree strongl tat ts s a uge o""ortunt$ Our goal 3t all o ourclents& ro: te bggest to te s:allest s to r5e ter busness results an
as usuall sellng a "rouct& so:et:es onlne but oten n stores$ 6e@5e
one a lot o 3ork o5er te last ear to :easure:ent$ 6e talk about
:easure:ent n all o tese calls an tat@s because n5estng :easure:ent
an connectng not ust so:e onlne to onlne& but onlne to oSne s su"er
:"ortant$ Because tat 3e can "ro5e tose results to our :arketers large
an s:all& te'll contnue to n5est$
6e tnk 3e a5e a real a5antage ere& tat 3e a5e real entt$ 6e a5e
real entt across te eskto" an across :oble$ +n 3e a5e oun 3as&
n 5er "r5ac "rotect5e 3as to 3ork 3t tr "artes -- tr "art users
o ata to connect oSne sales to onlne as an tose n5est:ents re:an a
5er bg ocus or us$
Operator
Lour neGt ?ueston co:es ro:
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8/9/2019 Facebook Earnings
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:onet=e ter a""s$ +n 3e a5e a nu:ber o ser5ces tat e5elo"ers can
"lug nto ter a""s to el" out 3t all tree o tose$ .o or eGa:"le 3e
a5e -- an or el"ng "eo"le bul ter a""& 3e o tngs lke logn an 3e
a5e ser5ces lke "arse tat el" e5elo"ers bul a""s :ore easl$ !at
stu> s all great or el"ng olks bul socal a""s n a 3a tat's aster tan
te coul a5e oter3se$
,n ter:s o gro3t& , tnk 3e o>er tools lke sarng an :essagng tat
"eo"le can enable$ Our e5elo"er can enable ter users to be able to
organcall s"rea te a""$ 6e also a5e tngs lke a"" nstalls an
engage:ent as tat :ake t so tat e5elo"ers an "a to ncrease tat$
+n ten on te :onet=e se& 3e are rollng out te +uence et3ork an
3e a5e -- an ten , guess on can5as 3e a5e tngs lke "a:ents to el"
e5elo"ers :onet=e an tat@s an ncreasng ocus as 3ell an +uence
et3ork s ne3 an t@s gettng starte$ .o t@s -- agan t@s one o te tngs
tat 3ll be "rett slo3 or a 3le but 3e reall 3ant o a great$ But tat@s
gong to be an :"ortant "art to ts as 3ell$ .o , tnk tat@s kn o o3 ou
3ant to tnk about e5elo"ers$ +n rgt no3 3e@re reall "rou about 0D
o te to" e5elo"ers& te 5alue an toucng a "art o our "lator:$ 6e
ob5ousl 3ant to get te last 20& but 3e@re eGcte about tat te "rogress
so ar$
Sheryl Sandberg
+n n ter:s o tose e5elo"ers usng our >erent a "roucts& as 3e sa
3e roll out slo3l an slo3l$ 7suall 3e "ck a anul o a5ertsers to 3ork
3t us& certanl 3at 3e@5e been ong on auto"la 5eo as$ But n t:e
our goal s to :ake our a "roucts a5alable to all o our :arketer seg:ents
an tat@s 3at 3e'll 3ork on$ .o o5er te long run& an e5elo"er& an s:all
or large busness& 3eter te're usng oter "arts o our "lator: or not&
3oul be able to "urcase an t"e o our as$
Operator
Lour neGt ?ueston co:es ro: Bran o3ak 3t .,9$ Lour lne s o"en$
$rian )owak- .,9
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, a5e t3o$ !e Arst one s on te 5eo as$ Lou :entone t@s te earl
as on 5eo a5ertsng an ust 3onerng& ou coul talk to so:e o
our earl learnngs& 3at ou@re "lease 3t an 3ere ou see areas or
:"ro5e:ent an 3c :etrcs our gaugng to eter:ne 3en to unergo
a broaer roll out$ +n ten seconl on te -- , tnk ou :entone te
larger ger ?ualt ;5eRal eskto" as$ !ere as been so:e canges n
eG"er:entaton aroun tat n5entor$ 8o3 oes te a5ertser rece"t5t
ben to tose a unts co:"are to te ol ;5eRal an 3ere are tose
ollars co:ng ro:P ,s tat ne3 ollars to te "lator: or are te are
stng ro: ol s"onsore stores or ;5eRal$ !anks$
Mark Zuckerberg
.o ,@ll talk about 5eo an ten .erl can ans3er on te rgt an colu:n$
!e bggest tng tat 3e 3ant to :ake sure s tat ?ualt s reall goo as
3e roll ts out an tat@s gong to be te sa:e on all o tese >erent
ntat5es$ +n one o te reasons 3 3e@re o"t:stc about 5eo a s
tat -- n auto"la s"ecAcall s te or:at or bot organc an "a content
s tat ou@re scrollng troug a ee an ou -- te content catces our
ee an ou lke t& ten t@s "lang an t's loae an ou can ust easl
contnue 3atcng t or oter3se te "erson as co:"lete control& an
te on@t lke t& te can ust kee" on gong troug t$ .o te content as
to be reall goo an 3e tnk tat tat@s gong to be a real g ?ualt
eG"erence$
!ere are stll a nu:ber o tngs tat 3e reall 3ant to "ro5e an :ake sure
tat 3e're ong 3ell ere$ 6e 3ant to :ake sure tat 3en "eo"le are see
an auto"la 5eo& tat@s not onl "a content$ 6e 3ant a lot o tat to be
organc content as 3ell$ .o 3e're trng to ra:" u" te a:ount o "ublc
content an content tat "eo"le sare at tat sa:e t:e as 3e're ra:"ng
u" on te auto"la 5eo as$
6e also 3ant to :ake sure tat ts oesn@t consu:e a lot o "eo"le@s ata$
.o 3e're ust beng reall careul about o3 3e anle tat an gettng tat
reall rgt across >erent :arkets& tat@s gong to be a >erent tng tat
2
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3e 3ant to be reall senst5e to$ .o t reall ust -- n a 3or ts all co:es
o3n to ?ualt an 3e@re :ore ocuse on ust :akng sure tat ts s te
rgt an best tng o5er t:e tan so:etng n te near ter:$
+n tat , tnk s a te:e o a lot o te areas tat 3e@5e talke about&
3eter t@s ne3 a""s tat 3e are bulng& tngs lke Messenger or
,nstagra: an 3at 3e're ong tere& 3orkng 3t +uence et3ork&
3c 3e ust announce or 5eo as$
!ere's ust a lot o tngs tat 3e're su"er eGcte about an ob5ousl 3ll
talk about te: "ublcall because 3e@re 3orkng 3t "artners an 3e@re
eGcte to talk about te: ere as 3ell because 3e o reall tnk tat tese
are gong to be great tngs to el" bul busnesses o5ert:e$ But 3e 3antto :ake sure tat 3e on@t get aea o oursel5es because tese tngs are
earl an ?ualt s te :ost :"ortant tng or gro3ng ts te rgt 3a
o5ert:e$
Sheryl Sandburg
On te rgt an colu:n reesgnJ te reesgn 3as r5en b :akng te
as :ore consstent 3t e3s Fee 3c results n e3er but larger as$
But te ust on@t co:e ro: an one "lace an , tnk 3en ou tnk
about Facebook's gro3ng "art n te a ecosste:& ou reall a5e to tnk
about a ollars stng onlne as te :aort o te r5er o buget
stng an a ollars co:ng on to :oble$ 6e are "lease tat 3e see
ger engage:ent rates ro: te "eo"le 3o 3ere so3n n ne3 as
co:"are to te ol& 3c :akes us o"t:stc tat tese are :ore
5aluable$
Operator
Lour neGt ?ueston co:es ro: Bran t= 3t #e>eres$ Lour lne s o"en$
$rian (it+- #e>eres
Mabe a ?ueston n a >erent recton regarng "r5ac an :abe ou
coul ust 3alk us troug our current tougts$ !e reason , aske s
because Facebook recentl ntrouce te anon:ous logn "rouct at F
2
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ts ear an ne3 ser5ces lke sa5e or en ro: rens unless users
s"ecAcall o"t n& can ou ust g5e us a sense& s ts kn o a cange o a
strategc st n tnkng or tone 3t regars to "r5acP !ank ou so
:uc$
Mark Zuckerberg
!s s - t@s a reall :"ortant ?ueston& , tnk so:ebo s :sunerstoo
about Facebook$ One o te tngs tat 3e ocuse on te :ost s creatng
"r5ate aces or "eo"le to sare tngs an a5e nteractons tat te
couln@t a5e a else3ere$ .o ou go back to te 5er begnnng o
Facebook& 3e@re :ore tan 10 ears$ !ere 3ere blogs an tngs 3ere ou
coul be co:"letel "ublc an tere 3ere e:als rgt$ .o ou coul
crculate so:etng co:"letel "r5atel$
.o tere 3as no s"ace 3ere ou coul sare 3t ust our rens an a5e
tat -- t 3asn@t a co:"letel "r5ate eG"erence& but t's not co:"letel
"ublc an tat t's 100 or 10 o te "eo"le tat ou care about$ +n
creatng tat s"ace& 3c 3as a s"ace tat a te kn o "r5ac tat no
one a e5er seen beore 3as 3at enable an contnues to enable te
kn o nteractons an te content tat "eo"le eel co:ortable sarng n
ts net3ork tat on@t eGst n oter "laces n te 3orl$
.o 3e're co:ortabl lookng or ne3 o""ortuntes to create ne3 na:cs
lke tat an o"en u" ne3 >erent "r5ate s"aces or "eo"le 3ere te can
ten eel co:ortable sarng an a5ng te reeo: to eG"ress so:etng
ou oter3se 3ouln@t be able to$ ,t@s one o te reasons 3 ,': "ersonall
so eGcte about :essagng$ Because lke rgt no3 , tnk at so:e le5el&
tere are onl so :an "otos tat ou@re gong to 3ant to sare 3t all o
our rens$ 6e stll tnk tat tere's :ore to o tere but t's lke tea:ount o :essagng an o3 ?uckl 3e see tat gro3ng& t's cra=$
Because lke tere s ust a lot :ore tat "eo"le 3ant to eG"ress an tat
te nee te tools to eG"ress 3t s:aller grou"s o "eo"le& not ust one
"erson at a t:e but s:aller grou"s as 3ell$ !ngs lke anon:ous logn
totall unlocks >erent bea5or$ .o o3 :an t:es 3oul ou 3ant to sgn
2I
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n to an a"" but ou on@t necessarl 3ant to sare a lot o nor:aton 3t
tat a"" but ou can o t anon:ousl& 3e tnk tat can unlock o lot o
>erent nteractons an eG"erences tat "eo"le 3ant to a5e$ .o 3e o
our obs as lke 5er una:entall "ro5ng "eo"le 3t tese s"aces an
tools& 3c , tnk s 5er >erent ro: o3 a lot o "eo"le tnk about 3at
Facebook s but t@s an :"ortant tng to tnk about o3 3e o our "rouct
e5elo":ent$
Operator
Lour neGt ?ueston co:es ro: Coln .ebastan 3t Robert Bar$ Lour lne s
o"en$
Colin Sebastian- Robert Bar, a5e a cou"le o ?uestons as 3ell$ Frst on :oble a5ertsng an a loas&
ust curous 3at ou are seeng n ter:s o te a loa tresolsP ,s tat
ou are at te "ont no3 3ere te rele5anc an ?ualt o as :eans tat
ou can take tat u" "era"s a lttle btP +n ten seconl on Oculus an
Hrtual Realt a""lcatons& o3 soul 3e tnk about te "ace o
e5elo":ent o ts tecnolog an te "otental ntegraton 3t Facebook@s
a""lcatonsP !ank ou$
Dave ehner
, can take care o te :oble a loa ?ueston$ .o a loa s reall one o
o=ens o actors tat 3e ocus on$ Oters are o course te ?ualt& te
rele5ance an ten te "ro:nence o te as$ +n 3e :ontor te
sent:ent an engage:ent o "eo"le& engagng n e3s Fee an 3e@re
reall "lease 3t te strengt o sent:ent an engage:ent as 3e@5e
ra:"e u" e3s Fee a""s an 3e eel lke 3e@re n a goo "oston& g5en
3ere 3e are 3t tat to contnue to gro3 te a5ertsng busness& 3le
r5ng goo user eG"erence$ .o 3e@re n a goo "lace on tat$
Mark Zuckerberg
, can talk about Oculus$ .o 3e@re reall eGcte about ts te ac?uston ust
close earler ts 3eek an 3e@re reall eGcte to 3elco:e tat tea:$
!e@re eGtre:el talente an te@5e "ulle o> so:etng tat "eo"le
2
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a5e been talkng about or a reall long t:e an no3 t@s "ossble& g5en
te tecnolog tat ts tea: as e5elo"e$ +n ts ts on a >erent "art
o our strateg& 3c -- te 3a tat , organ=e : re:arks e5er ?uarter
are aroun tese 10 ear goals an te:es tat 3e a5e or te Co:"an&
connectng e5erone& unerstanng te 3orl& el"ng to bul te
kno3lege econo: an tese uture "lator:s$ .o 3en ,': talkng about
o3 , tnk tngs lke te busnesses tat 3e@re talkng about are urter out
tan ou tnk& , tnk tat ts stu> s actuall e5en urter out tan tat$
But tere are uge o""ortuntes to bul te neGt generaton o co:"utng
"lator:$ 6en :oble 3as gettng eAne 3e 3ere bascall ust gettng
oune& n 2004$ !e Arst .:art"one ca:e out an 200%$ +n 3e a5e
:ostl been a co:"an tat as "lae on to" o te >erent :oble
ounatons tat oter co:"anes a5e bult$ +n one o te tngs tat ,
care reall ee"l about on so:e o te tenures arc or te co:"an s
a5ng a >erent relatons" to 3ate5er te neGt set o co:"utng
"lator:s are an n5estng accorngl no3 to :ake sure tat 3en te neGt
set o co:"utng "lator:s get eAne& 3e can el" eAne 3at te neGt
generaton o co:"utng s gong to be$
.o , tnk 5rtual realt& aug:ente realt& 5son& so:e o te +, 3ork tat
3e@re ong& s all gong to "la nto ts n an :"ortant 3a$ +n , ust tnk
3le , 3as e:"as=ng tat 3e@re earl on so:e o tose busnesses an
3e@re not gong to rus tose$ !e " se to te con s to e:"as=e tat
3e@re also gong to s"en a lot an n5est 5er ea5l n a bunc o tese
tngs to o t rgt o5er te long ter:$ +n so , tnk /a5 "onte out tat
3e eG"ect to contnue n5estng ea5l an tat our costs 3ll ncrease$ +n
, ust 3ant to unerscore tat as 3ell& because , eG"ect tat contnue to be
true an t@s not tat 3e@re necessarl gong to go out an a5e a lot :ore
ne3 strategc "rortes& but 3e eG"ect to go 5er ee" on te "rortes tat
3e a5e to :ake sure tat 3e co:"letel nal te: all& 3eter t@s a A5e
ear or a 10 ear t:e ra:e$
Deborah Crawford
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O"erator& , tnk 3e a5e t:e or one last ?ueston$
Operator
Lour last ?ueston 3ll co:e ro: Ben .cacter 3t Mac?uare$ Lour lne s
o"en$
$en Schachter- Mac?uare
!anks or takng : ?ueston$ Mark ou talke about te ocus on "ublc
content$ /oes tat nclue a ocus on eGclus5e content tat 3e soul be
eG"ectng to "a or or a5e re5enue sare agree:ents 3t te content
3t so:e ke "ublc AguresP .e"aratel on .earc& , tnk ou stll a5e a
?ute a large tea: 3orkng on t& nclung .earc& but our greatest "ont& 3e
a5en@t seen :an canges snce te orgnal "lae te gra" as "art ote launc$ .o 3en soul 3e eG"ect to see tose :"ro5e:ents an o3
3oul ou rank .earc n ter:s o 3t our "rortesP +n ten Anall ust a
?uck ousekee"ng ?uestonJ /a5& te /+ contnues to tren o3n o5er
te "ast e3 ?uarters$ 6 s tat a""enng an soul 3e eG"ect tat to
contnueP
Dave ehner
, can take te /+ ?ueston Arst ou@ lke$ .o ult:atel e"recaton s
gong to track :ore olks closel aganst te Ca"EG$ .o n te Arst al o te
ear 3e@5e been aggress5el n5estng n te tngs 3e 3ant to n5est an
tat nclues nrastructure$ .o Ca"EG s u" 40D n te Arst al o te ear$
!ere are so:e n5est:ents tat 3e@re :akng notabl n te ,o3a
atacenter& also te ne3 ea?uarters 3e@re bulng 3ere tose acltes
a5e not gone nto ser5ce$ .o te@re not ttng e"recaton et$ .o& 3e@re
:akng te bg n5est:ents n Ca"EG tat 3ll ult:atel o3 troug n
/e"recaton$ .o , tnk n sort te ans3er to our ?ueston s 3e@ll see
e"recaton co:e u" as tose tngs co:e onlne$
Mark Zuckerberg
+n , guess , can ans3er te oter$ .o on "ublc content& 3e actuall o get
a lot o eGclus5e content$ 6e on@t "a or t$ But , :ean so -- ts 3eek or
eGa:"le , tnk .akra t er 100 :llon ans :o:ent on Facebook$ +n
%0
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"art o te reason 3 so:e o tese "ublc Agures an "oltcal leaers an
olks a5e suc bg ollo3ng s because te@re constantl "ro5ng nsgt
nto ter l5es an un?ue t"es o contents tat oter olks -- tat ou can@t
get an3ere else$ +n tere s a or:at tat , tnk :ake sense or
Facebook$ ,t@s not an ou@re not gong to co:e to Facebook to 3atc a
:o5e or 3atc a 3ole !H so3$ !at@s reall long or: stu>$ But , :ean n
te :oes tat 3e a5e toa n our ser5ce tat kn o attracton s te
best "lace or a nu:ber o t"es o content lke ts tat 3e@re startng to see
tat 3e get$
.o 3e@re :ostl ocuse on r5ng success or our "artners& 3ere te are
ne3s organ=atons tat are "ublsng content tat "eo"le sare or "ublc
Agures an n5uals 3o are engagng rectl on Facebook$ Our 5e3 s
tat te :ore success n strbuton an engage:ent 3e can r5e or te:&
te better te content an te ?ualt tat te@re gong to n5est n bulng
or Facebook$ +n t"es o searc& , tnk -- , :entone n : o"enng
re:arks tat ts ?uarter , tnk or te Arst t:e 3e are o5er on a5erage 1
bllon searces a a& 3c s a3eso:e an t's so:etng tat 3e@re reall
"rou o an a5e 3orke a lot on& es"ecall g5en tat 3e generall oun
tat "eo"le searc a lttle bt less on a5erage on :oble$ .o 3e 3ent troug
a "ero 3ere n orer to a5e tat ncrease& 3e a to lke o so:e reall
goo 3ork an :ake t a lot aster an :"ro5e rankng an o a lot o te
basc tngs tat neee to get one$
!ere s ust so :uc :ore content tat nees to get neGe$ .o ou 3ant
to go An tat .akra 5eo tat , 3as ust talkng about& , on@t kno3
toa te "rouct ull el5ers on tat but t 3ll soon an n te neGt sG
:onts 3e@re gong to be able to o tat an ten 3e o 3ell an te: a
ear later 3e@re gong to a5e :ore content n te sste: an be able to
neG tat better$
.o t@s an ongong tng$ !ere s uge "otental$ !ere are a lot o ?uestons
tat onl Facebook can ans3er& tat oter ser5ces aren@t gong to be able to
ans3er or ou$ 6e@re reall co::tte to n5estng n tat an bulng out
%1
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ts un?ue ser5ce o5er te long-ter:$ +n , tnk at so:e "ont tere s
gong to be an necton 3ere t starts to be useul or a lot o use cases$
But tat :a stll be ears a3a$ But 3e@re ust co::tte to ong ts
n5est:ent an :akng ts rgt$
Deborah Crawford
9reat$ !ank ou or onng us toa$ 6e a""recate our t:e an 3e look
or3ar to s"eakng 3t ou agan$
Operator
!s conclues toa@s conerence call$ Lou :a no3 sconnect$
Copyright policy, +ll transcr"ts on ts ste are te co"rgt o .eekng
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!8E ,FORM+!,O CO!+,E/ 8ERE ,. + !ET!7+; RERE.E!+!,O OF !8E
+;,C+B;E COM+L'. COFERECE C+;;& COFERECE RE.E!+!,O
OR O!8ER +7/,O RE.E!+!,O& +/ 68,;E EFFOR!. +RE M+/E !O
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