UPDATED 09:48 EDT / NOVEMBER 03 2014

Facebook CEO Mark Zuckerberg NEWS

Can Facebook’s spending keep the social network relevant?

Facebook CEO Mark Zuckerberg

Facebook CEO Mark Zuckerberg

Fighting to stay on people’s radar lately, Facebook Inc.’s been busy releasing new apps like Rooms and announcing their first community Q&A with Facebook CEO Mark Zuckerberg going on later this week.

But the company’s recent Q3 earnings call has investors worried about the social network’s plans future.

In particular, investors were shocked when Facebook management said that they planned on spending up to 75 percent more in 2015, more than double the 35 percent figure analysts were predicting.

Facebook stressed that the increased spending was not a sign of trouble for the company, but rather it was part of a long term plan designed to ensure the company’s relevance and stability in the future.

Facebook isn’t the only tech company spending big. Google Inc. is set to reach $10 billion in capital expenditures by the end of the year. Apple Inc. reached $11 billion when its fiscal year ended in September, and it plans to spend 18 percent more this year, with most going toward manufacturers in Asia.

Talking about the company’s increased spending in relation to improving ad technology, Facebook COO Sheryl Sandberg said:

The payoffs will take time, but we think they provide a necessary foundation for the advertising industry to make the shift to mobile, and for Facebook’s long term growth.

In the earnings call, Zuckerberg emphasized that Facebook is still going strong, noting that advertising revenue for Facebook grew 64 percent over the last year, and the company’s total earnings this quarter reached $3.4 billion. According to Zuckerberg, 1.35 billion people use Facebook each month, with 64 percent of them using Facebook daily.

When asked if there would be any progress in a consumer version of the Oculus Rift VR headset or in Facebook search over the next one or two years, Zuckerberg skirted the question, saying that there would not be relevant numbers of the Occulus Rift for several years, and search will also take some time to reach a meaningful level.

Zuckerberg said: “This may sound a little ridiculous to say, but for us products don’t really get that interesting to turn into businesses until they have about a billion people using them.”

 


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