Facebook to make capital investments worth $1.6 billion in 2013

Social networking giant Facebook,
whose user base is expanding primarily
on the back of rising penetration in
emerging markets like India and Brazil,
will make capital investments worth USD
1.6 billion this year.
In the first half of this year, the
California-based firm incurred a
capital expenditure of USD 595 million
on setting up data centres and storage
infrastructure, among others.
Besides, Facebook shelled out USD 221
million on acquisitions and other assets
such as patents.
"We anticipate making capital
expenditures in 2013 of approximately
USD 1.6 billion," Facebook said in a
filing to the US Securities and
Exchange Commission (SEC). Industry
watchers feel that the company will be
looking to capitalise on its user numbers
and its mobile advertising base.
Bolstered by rising number of users in
high growth markets like India and
Brazil, Facebook raked in 61 percent
USD 1.60 billion of its total revenues
from advertising in the second quarter
of this year.
Internet major Google, which is also
competing with Facebook, generated 92
percent of its revenues from its
advertisers in the six months ended
June 30.
Facebook's investment plans for
increasing infrastructure would get a
boost as it posted strong second
quarter results helped by a surge in
user base and rising mobile ad revenue
, which now represents 41 percent of
its total revenue from advertising,
they added.
Facebook posted a net income of USD
333 million for the April-June quarter
against a loss of USD 157 million in
year-ago period. Its revenue totalled
USD 1.81 billion in the second quarter,
an increase of 53 percent, compared
with USD 1.18 billion in the second
quarter of 2012.
"Cash used in investing activities
during the first six months of 2013
primarily resulted from USD 595 million
for capital expenditures related to the
purchase of servers,
networking equipment, storage
infrastructure and the construction of
data centres," Facebook said
It also spent USD 221 million on
acquisitions of businesses and other
assets like patents, according to the
filing.
On the back of surging user base in
the emerging markets of India and
Brazil, the social networking giant saw
its monthly active users jump 21
percent to 1.15 billion at the end of
June 2013.
"Users in India and Brazil represented
key sources of growth in the second
quarter of 2013 relative to the prior
year," Facebook has said.
The firm's global daily active users
(DAUs) rose by 27 percent to 699
million on average during June 2013
from 552 million during June 2012, again
helped by growth in India, Brazil and
other markets.