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Facebook profit soars 138 percent in second quarter

By Robert Faturechi

Los Angeles Times

LAST UPDATED: 5:43 p.m. HST, Jul 24, 2014

Facebook is on a tear.

The number of users on the site continued to grow rapidly last quarter, while advertising revenue grew even faster.

The social network exceeded investor expectations yet again Wednesday, announcing second-quarter net income of $791 million, up 138 percent from a year earlier.

The number of active daily users was 829 million on average in June, up 19 percent. In the mobile sub-category, Facebook's main focus lately, growth was up 39 percent, to 654 million.

Ad revenue soared 67 percent to $2.68 billion compared to the same quarter last year. Unlike last year, mobile ads accounted for the majority — 62 percent — of the total.

"We had a good second quarter," Facebook Chief Executive Mark Zuckerberg deadpanned in a statement. "Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world."

Facebook is expected to take about 8 percent of the digital ads market worldwide by the end of the year, second only to Google, according to eMarketer.

Brian Wieser, an analyst at Pivotal Research, said Facebook possesses more valuable user data than any company except Google. He used "Star Wars" terms to describe the two tech giants, comparing them to "Luke and Darth ... the two of them rule the universe."

Wieser added that privacy concerns over a recently reported science experiment that Facebook performed on users and their newsfeeds is a "non-issue" to "investors, advertisers or the general population."

Facebook recently announced that it would be acquiring LiveRail, a video ad service. In a conference call after the earnings were announced, Chief Operating Officer Sheryl Sandberg said Facebook's recent focus on online video ads would debunk the notion that creative storytelling in advertising was exclusive to TV.

"The way people approach TV, they'll also approach Facebook," she said.

Facebook shares closed up $2.02, or 2.9 percent, at $71.29 on Wednesday. The earnings report sent the shares up an additional 5 percent in after-hours trading.

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