GigaOM reports Facebook's latest financial earnings aren't too impressive. While revenue is up 44 percent from the same period a year earlier to over $1 billion, it actually fell compared to the previous quarter, and net income in the social networking site's most recent quarter was lower than it was in the previous five quarters.
While the quarterly dip in revenue could be just a seasonal blip in an otherwise-growing advertising business (although Facebook’s payment-related revenue also flattened), the fall in net income is a bit more worrisome. Running a Web business without making a profit may be taken for granted when it comes to startups like Instagram, which Facebook just acquired for $1 billion. But when you get to be the size Facebook is — and you ask the public markets to value you at close to $100 billion — investors and analysts are going to want to see some money flowing to the bottom line, and lots of it.
According to Facebook’s filing, which is embedded below, the main reason for its lower profit was higher costs, particularly for marketing: Costs related to marketing and sales more than doubled to $159 million from $68 million a year earlier — almost as much as the company spent in all of 2010. In total, Facebook’s cost of revenue climbed by more than 65 percent compared to the same quarter in 2011.