Facebook results reassure investors

Facebook Inc, reporting its first results since selling shares to the public, posted sales that topped analysts’ estimates, signalling buoyant demand for advertising and reassuring investors who have pummelled the shares on concern over the company’s growth prospects.

Second-quarter revenue rose to $1.18bn, Menlo Park, California-based Facebook said in a statement. That compares with an average estimate of $1.16bn, according to data compiled by Bloomberg. Profit excluding certain costs was 12 cents a share.

Businesses are taking advantage of tools introduced by chief executive Mark Zuckerberg that are designed to help marketers reach Facebook’s user base, which swelled to 955 million last quarter.

The company rolled out its first mobile ads in March and announced plans in June for ads based on Web- browsing history. The results may lessen the pessimism that has dragged down shares 29% since the May 17 initial public offering.

“Ultimately, Facebook is just an advertising platform, and so advertisers go where people’s eyeballs are,” said analyst Michael Pachter.

Based on the users Facebook has amassed, “they’ve built the third-largest country, it just happens to live on the internet.”