Facebook stock reaches new record following earnings report

Facebook’s user growth has slowed lately, but it’s still on the rise. Other social networks haven’t been so lucky — in part because it’s become so hard to keep up with Mark Zuckerberg’s 800-pound gorilla of a company.

Following its earnings report, Facebook rallied to a fresh all-time record close of $172.45 a share on Friday, up 5 percent for the week. Investors welcomed confirmation of its dominance of the digital advertising market, with only Google as a significant competitor at this point.

On a conference call following the earnings report, Facebook executives noted that they’ve been experimenting with different ad-pricing models, especially in video, so that they’ve been able to charge higher rates for many ads. The average ad price on the platform rose 24 percent for the first quarter, which helped to boost profits.

That’s a much faster growth rate than Facebook’s user base, which founder and chief executive Zuckerberg noted is now at over 2 billion average monthly users — up 17 percent from a year ago. The quarter-to-quarter growth rate in users was 3.4 percent, down from 4.3 percent in 2017’s first period.

To put it in perspective, 2 billion monthly users represents a majority of everyone on the whole planet who has internet access in any form, according to the best available estimates. It’s a staggering user headcount in absolute terms. But it’s also hard to grow at a significant rate, as Facebook is also discovering.

So why haven’t tech investors — usually prone to growth-at-all-costs thinking — punished Facebook? Because its rivals are faring even worse right now. Consider:

– In its earnings report this week, Twitter reported zero quarter-to-quarter user growth. Yes. Zero. On a year-over-year basis, its users were up 12 percent. That’s a decent figure, but still a notch slower than Facebook’s growth.

– Snapchat has also had a hard time generating user growth lately — and seen its stock punished as a result. In particular, Wall Street is concerned that its count of daily active users has been surpassed by that of Instagram Stories, a directly competing feature on the Facebook-owned photo platform.

– Microsoft-owned LinkedIn seems to be faring a little better in growing its usage, but at a steep price. The platform’s operating costs were recently up 41 percent compared to a year ago, cutting into the network’s profitability, according to Microsoft’s latest earnings report.

The also-ran social platforms may also take some solace in the upcoming week as the earnings spotlight shifts from networks to hardware. Apple’s quarterly results will be the main event, with Fitbit and Pandora due out as well.