Ending a tumultuous day for social-media companies, Facebook posted a loss Thursday in its first test as a public company.
Investors fled the social-networking giant in after-hours trading following a second-quarter loss of $157 million, which included one-time charges related to the accounting of stock awards disclosed amid the botched initial public offering on May 18.
On an adjusted basis, Facebook posted a profit of $295 million, or 12 cents a share, on revenue of $1.18 billion. That met analysts' estimates.
Its shares plunged 11% in after-hours trading to $23.77 after losing nearly as much during the day's trading session. Stocks of other social-media companies fell further after the bell, too, including Zynga, Groupon and LinkedIn. They had fallen during regular trading even as the market rallied.
Meanwhile, a problem at Twitter's data centers took the site offline for several hours, affecting millions of users. Google Chat also crashed.
The stakes are high for Facebook as questions swirl about its online and mobile advertising business. Its initial valuation of $100 billion is now around $60 billion. "They have to show they can justify" even that lower valuation, says Lucy Jacobs, chief operating officer of Spruce Media, a technology platform for social-media advertising.
There was some good news. Facebook's revenue of $1.18 billion in its second fiscal quarter beat consensus estimates of $1.15 billion. But even that was a disappointment for investors who had hoped for more, says analyst Jordan Rohan of Stifel Nicolaus.
Like nearly every business in social media and beyond, Facebook is betting a chunk of its future on mobile ads. Yet few companies, including Facebook, have been able to capitalize on the promise.
The market for the ads that dot smartphone and tablet screens is expected to soar to $10.8 billion in U.S. sales by 2016, from an estimated $2.6 billion this year, says research firm eMarketer. "Mobile is a huge opportunity," CEO Mark Zuckerberg said on a conference call with analysts.
Google has the early lead in the U.S. in monetizing mobile, with 51 percent of the market, largely due to its success with mobile search ads, says Noah Elkin, an eMarketer analyst. Facebook barely registers, but it has the potential to rake in $2.54 billion from mobile ads, researcher Chitika says.
Zuckerberg downplayed a rumored mobile phone from Facebook, adding that it "wouldn't make much sense."
