We have a difficult announcement to make. Beginning today, we’re winding down the Parse service, and Parse will be fully retired after a year-long period ending Jan. 28, 2017. We’re proud that we’ve been able to help so many of you build great mobile apps, but we need to focus our resources elsewhere.
We understand that this won’t be an easy transition, and we’re working hard to make this process as easy as possible. We are committed to maintaining the back-end service during the sunset period, and we are providing several tools to help migrate applications to other services.
First, we’re releasing a database migration tool that lets you migrate data from your Parse app to any MongoDB database. During this migration, the Parse application-programming interface will continue to operate as usual based on your new database, so this can happen without downtime. Second, we’re releasing the open source Parse Server, which lets you run most of the Parse API from your own Node.js server. Once you have your data in your own database, Parse Server lets you keep your application running without major changes in the client-side code. For more details, check out our migration guide here.
We know that many of you have come to rely on Parse, and we are striving to make this transition as straightforward as possible. We enjoyed working with each of you, and we have deep admiration for the things you’ve built. Thank you for using Parse.
Moving forward, we want to dedicate more resources to high-impact products and services in areas like analytics, monetization, discovery and authentication. As a result, we’ve made the difficult decision to wind down support for Parse. We’re proud of what we’ve accomplished together with the Parse community, and we thank them for their support.
Readers: Are you as surprised as we were?
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Mobile continued to increase its share of the Facebook revenue pie, accounting for 80 percent of the company’s total advertising revenue in the fourth quarter of 2015, up from 69 percent in the fourth quarter of 2014.
Facebook reported its financial results for the fourth quarter of 2015 and the full year after market close Wednesday, and highlights included:
The social network also announced the following milestones that were achieved during 2015:
Highlights follow from Facebook’s earnings call, which took place after market close Wednesday.
On advertising in general, chief operating officer Sheryl Sandberg said during her opening remarks:
Last quarter, we announced that we had over 2.5 million active advertisers, and since then, our growth has remained strong. This represents a small fraction of the over 50 million small businesses now actively using pages. So we see a big opportunity to continue to grow the number of Facebook advertisers going forward. We’re also very pleased with the growth in advertiser adoption of Instagram and the positive results advertisers are seeing from their investments. 98 of the top 100 advertisers on Facebook also advertised on Instagram in the fourth quarter.
The ad load on Facebook and Instagram came up frequently during the question-and-answer part of the call, with JPMorgan Securities analyst Douglas Anmuth asking:
On the ad load, a few years ago, you talked about ad load at mid-single-digit levels, and then more recently, it is up significantly since then. Do you still feel like there is still significant room to increase ad load here, and how do you think about the theoretical ceiling there?
Chief financial officer David Wehner replied:
Ad load is definitely up significantly from where we were a couple of years ago. And as I mentioned, it’s one of the factors driving an increasing inventory. Really one thing to kind of think about here is that improving the quality and the relevance of the ads has enabled us to show more of them without harming the experience, and our focus really remains on the experience. So we’ll continue to monitor engagement and sentiment very carefully. I mentioned that we expect the factors that drove the performance in 2015 to continue to drive the performance in 2016. So, I think that’s the color I can give on ad loads.
And in response to a question from UBS Securities analyst Eric Sheridan regarding Instagram, Sandberg said:
When we introduce ads into feed and continue to increase the ad load, we monitor it really carefully. We’re looking at user engagement on the platform. We also look at the quality of ads. And our basic belief is that if we have high-quality ads, they create a good consumer experience, and we can look at what consumers are doing because we can understand how actively engaged they are on the platform. For Instagram, we don’t break out revenue, but we’re pleased with the growth on Instagram. And as I mentioned, 98 of our top 100 advertisers in Facebook are now advertising on Instagram. It’s also the case that Facebook had remarkably strong growth, as well. So, we’re seeing strong growth across those platforms.
I think what’s exciting about those platforms is that they combine the art and the science of both a creative canvas that marketers are excited about and targeting. So to share another example from a holiday, Shutterfly did a Facebook and Instagram campaign, both the brand and direct-response holiday campaign on mobile. And what they did was just beautiful pictures, but also targeting very specifically to women with specific interests, such as things like weddings and babies, and they saw a 6.4 times return on ad spend. We think that’s was possible when you combine the creative canvas we have using the technology and using the platform that we’ve created.
Video ads are important on our platform, and the most important thing that’s growing well there is consumer engagement with video is growing. We have 500 million people watching video per day. And the fact that so much video is being consumed on our platform gives us room for an ads business to grow because we want the formats to match. Marketers also really love video, and it’s a really compelling way to reach people, and video is contributing to our growth. It’s important to note that it’s not just large brand advertisers that are doing video, but all of our market segments–direct response, SMBs (small and midsized businesses) have uploaded 1.5 million videos in the past month, and developers. The video ad spend is not all incremental, of course, because every time we put an ad in News Feed, if it’s a video ad, it’s taking a place of an ad with another format.
In terms of learnings, one of the most important learnings we have is that video formats are different on Facebook. There are certainly people who are watching the whole 30-second video ad with sound, but there are some people that are doing less–they’re watching shorter formats and they’re watching without sound. And one of the challenges we have in the market is convincing marketers and agencies and people that make the video to expand them with different formats. The good news is that we’re getting great results, and when people are willing to experiment, this is a pretty unique canvas. You can do short-form with sound off, you can be longer-form with sound on and everything in between. And our ability to persuade marketers to experiment is going to be a major driver of how much we can do here.
Co-founder and CEO Mark Zuckerberg addressed Instagram, Messenger and WhatsApp during his opening remarks:
Next, let’s talk about how we’re building our next generation of services. With Instagram, we’ve continued to drive a shift toward more visual content online. The community continues to grow. And back in September, we announced a milestone of 400 million monthly actives. Over the last year, as the community has grown, we have focused on building engaging new experiences for the community including by improving search and by introducing trending content. We’ve also worked to develop new experiences to give people more options for creating and sharing different types of content. In March, we launched Layout, allowing people to easily combine images. And in October, the team also launched Boomerang, an app for making looping videos, which reached No. 1 in the iTunes App Store in more than 70 countries. We also introduced a new video channel on Instagram (Spotlight Compilations) for people to watch moments from big events like the New Year or the college football championship.
With Messenger and WhatsApp, we’ve continued to make progress with building ease into valuable communication services for everyone in the world. More than 800 million people now use Messenger monthly, and in 2015, we grew that number by almost a quarter of a billion while also increasing engagement. We continue to give people new ways to communicate by introducing video calling and new options for customizing conversations with fun things like colors and emojis and by using apps via Messenger Platform.
We also worked to extend Messenger’s utility by adding payments, a new way to capture businesses, and by testing M, a digital assistant powered by AI (artificial intelligence). In this quarter, we also began testing the transportation platform, allowing people to request an Uber ride through Messenger. More services will be coming to the platform soon, including airlines.
WhatsApp ended the year with nearly 1 billion monthly actives. As WhatsApp has grown, we work to keep it fast, simple and reliable. And we’ve seen many communities come to depend on this as their main communication service. To serve these communities well, this month we announced that WhatsApp will now be free to everyone and will no longer charge the subscription fees that many people were charged after their first year. We think this is an important step toward creating an even more ubiquitous product without affecting our plans for building WhatsApp into an important business in the coming years. Later this year, we’ll be testing new ways for people to use WhatsApp to communicate with businesses and organizations that they want hear from.
In response to a question from Anmuth about Messenger Platform, Zuckerberg said:
On Messenger, the platform efforts in 2015 focused on two things. One was extending the different types of content that people could share in Messenger. And that diversity is going really well. And we see continued increase in video sharing and photos and stickers, and a lot of stuff that you would just call fun but that people really enjoy as different ways to express themselves. But in terms of the business, the more important piece is how people can interact with businesses through Messenger. And we started some early small tests around last year where some e-commerce services made it so that people who were buying things could follow up with the business and get customer support, buy more things. And we went through this process of integrating that and making sure that it’s integrated with all these systems well. And I think everyone is really happy with that so far. So we started off pretty slowly, but that’s going to be some of the basics for how we look to make Messenger a business going forward. And we’re happy with the initial results. There is obviously a lot more there that we need to do, and we’ll have more to talk about this year and beyond.
RBC Capital Markets analyst Mark Mahaney asked:
Mark, the story is that in 2012, with the beginning of that year, you realized just how powerful the movement was toward mobile devices, and you turned to your engineers and said, “We need to generate $1 billion in revenue off of mobile devices.” And I wonder if you’ve had that same conversation with your engineers when you think about these two messaging platforms (Messenger and WhatsApp) that you have that have a large number of users, and clearly globally, we’ve seen this massive shift of the word messaging–the interest is changed now, people have engaged with it. Do you feel like you’ve had or do you need to have that $1 billion conversation with your engineers about those two messaging platforms?
In terms of the story that you said, I think you have it wrong. I don’t know where you got that story from. I’ve never had a conversation with the team where we were behind on mobile and then I said, “We need to do this to make money.” That’s not really how we operate. What happened is we realized that mobile was growing faster than desktop and that people were shifting their usage and that it was the more important thing for people’s consumer experience. And that’s when we made the shift, not in our business first, but in how we develop products. And I told all of our product team that when they come in with products to review, really just come with mobile. If you come in and you try to show me a desktop product, then I am going to kick you out: You have to come in and show me a mobile product. And that I think was just as a crude leadership tactic, somewhat effective and helping to motivate the organization to shift its energy toward focusing on mobile.
But if you remember, we actually went through a pretty tough period because we went through this period where our mobile experience was not as good as we wanted it to be and we had no ads on mobile. And we actually prioritized making the mobile experience good before putting ads there. So there was a long time where people thought that our business might not be as good because we had no ads on mobile, and that was because we always prioritized the experience for people, even if it was going to be a painful thing for the company.
So that’s how I think about messaging. We know that messaging is going to be increasingly important–that’s why we went out and hired (vice president of messaging products) David Marcus, who is one of the best product leaders in the field, for Messenger, and why we bought WhatsApp, which is the leading messaging product worldwide. And we have a formula for how we build these businesses. First, you build a great consumer experience that helps people share in a new way that’s really important. Then after that, you can start to introduce organic ways that people can interact with businesses, so that in Facebook is pages, the businesses that people want to interact with, the public figures, the politicians–not necessary ads, but organic interactions around not necessarily just your friends and families but more public figures and businesses. And then only once you have that ramped up to a good scale, can you really start dialing up advertising having that feel good and be a good part of your experience with good content, because all those public figures and businesses are already participating in the platform at scale.
So, you could expect to see that playbook in Instagram. We’re pretty far along in terms of having quite a mature pubic content. Ecosystem and ads are ramping well with good high-quality ads because a lot of public figures and businesses are already investing in creating that kind of good content that goes in Instagram. And you’re going to see the same playbook in Messenger and WhatsApp. In terms of making it so there are organic businesses and public figures, there is a bit more of that on WhatsApp already in terms of businesses using it, and we are catching up on Messenger: We’ll do that on both. And once we have those ecosystems built out, we will build businesses around them. And that’s how we think about stuff and we’ll do that in all of our products and the different things that we do going forward.
Mahaney also asked about the impact of political advertising related to the upcoming 2016 presidential election, and Sandberg said:
In terms of the election, it’s important to note that we’re large and diversified, so no one vertical drives our business. Yes, the 2016 election is a big deal in terms of ad spend, but so is the World Cup, so is the Super Bowl every year, so are events like the Olympic Games. We are excited about the targeting we’re able to offer for our ad platform. We believe we have a position that doesn’t exist on any other platforms. So for example, using Facebook and Instagram ads, you can target by congressional district, you can target by interest, you can target by demographics or any combination of those. And we’re seeing politicians at all levels really take advantage of that targeting.
It’s also probably worth saying that we’re pretty excited about what’s happening with the elections organically on Facebook. Facebook is really the new town hall. And connecting the people who are running for office–both at the national and the local level–with people directly has been really important. Every member of Congress in the U.S. is now on Facebook. We’re seeing some of them post every vote and explain why they’re doing votes. We’re seeing a bunch of candidates for president get on Facebook themselves and interact, taking questions from their potential voters directly. And we think that kind of direct engagement–where people can hold their elected officials accountable and elected officials can speak directly to constituents–is a really important part of our mission. We’re excited about the 2016 election and what’s happening there.
Finally, Zuckerberg offered a few more details about AI during his opening remarks:
With our working AI, we continue to make progress toward the new generation of computers that can see and understand. Over the past year, we published dozens of research papers, including some of the leading work on image recognition and language understanding. To drive the entire AI community forward, we’ve also open-sourced software and a lot of new AI hardware platforms.
Achieving the scientific breakthroughs to build AI that makes a dramatic visible difference in people’s lives is going to take a long time. But already we’re seeing opportunities to serve our community. We recently built a prototype AI system that combines language and vision comprehension. You can show it an image that it’s never seen before, and it can answer questions about that image. And we’ve even used AI to help blind people experience their friends’ photos and News Feed by describing the theme.
Spreadex senior market analyst Connor Campbell said in an email to SocialTimes:
As ever, Facebook was overflowing with friends following its latest quarterly report. Cementing its unparalleled position in the social media landscape with a 17 percent increase in daily active users to 1.04 billion, the company completed a trifecta of impressive figures with a 51.7 percent rise in revenue to $5.8 billion alongside a $900 million jump in profit to $1.6 billion year-on-year. It’s an astonishing set of results that puts even further distance between the big blue monster and its ostensible rival, Twitter, with investors more than receptive to the report, and Facebook climbing around 7 percent in the aftermath.
Readers: What did you think of Facebook’s financial results for the fourth quarter of 2015 and the full year, as well as the comments made during the company’s earnings call?
Image courtesy of Shutterstock.
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It’s been a big year for Facebook — not just for the business side, but for developers too.
Some of our most widely adopted projects saw additional uptake in 2015. WordPress and Netflix revamped their products with React. Etsy migrated to HHVM this year, and Box announced that our virtual machine would be the exclusive engine serving its PHP codebase. Presto, our interactive querying engine, is used by companies like Airbnb, Dropbox, and Netflix, as well as by Gree, a Japanese social media game-development company, and Chinese e-commerce company JD.com.
Abernathy noted that React and HHVM became Facebook’s first projects to hit 10,000 stars (React actually reached more than 30,000 stars). Here’s a star count for all of Facebook’s open source projects:
Abernathy looked ahead to 2016:
Now, with more than 330 total repos, we value contributions from our community more than ever to help us collaborate on solutions for common challenges. We had more than 2,500 external contributors this year, up from 1,000 in 2014. A special shoutout goes to Teradata — which joined the Presto community this year with a focus on enhancing enterprise features and providing support — for having seven of our top 10 external contributors.
While we’ve grown and accomplished so much this year, we still have more work to do. In 2016, we’re doubling down on our commitment to supporting projects, and we look forward to even more collaboration with our community.
Top image courtesy of Shutterstock.
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