Facebook hit as profits slide

Stephen Foley

Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.

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The prospects for Facebook getting a top-of-the-range valuation
when it floats on the stock market took a knock last night when the
company reported disappointing advertising revenues and a slide in
profits for the early part of this year.

In an updated prospectus, filed to reflect trading since the company first announced plans to go public, the company said it made a profit of $205m (£125m) in the three months to the end of March, a 23 per cent slide from the same period last year.

That reflected, in part, Facebook's splurge on new engineering and sales staff, but it also reflected a slowdown in advertising growth. Revenues of $1.06bn were lower in the first three months of this year than in the fourth quarter of 2011, and a relatively disappointing 45 per cent increase over a year ago.

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