Facebook Posts Loss

It’s a bad week for many tech companies.

Social networking giant Facebook has reported a US$157 million loss in its earnings report. This is the first time that Facebook is reporting following its public offering a few months ago.

Facebook, however, posted growth in its overall revenue. It also said operating profits and user base has grown. At the end of the second quarter, Facebook grew to 995 million users. Activity also increased with daily active users growing 32 percent.

According to Facebook, the loss is due to accounting systems which led Facebook to set aside its reserves from restricted stock units before the end of 2011. Facebook shares closed yesterday at US$23.94.

According to US Global Investors senior trader Michael Matousek, Wall Street is looking for more from Facebook. He added that it remains to be seen how Facebook would monetize its billion of users.

When Facebook went public in May, its offering price was pegged at US$38 per share. Investors are now worried whether Facebook can convert its operations to a long-term money-making machine.

Facebook has been a cultural phenomenon that started in a Harvard dorm room in 2004. The eight-year-old site is the first American company to have debuted with over US$100 billion in value and naturally, expectations on its performance have remained high.

Although Facebook shows no sign of slowing down in terms of users, activity, and advertisers, Wall Street is still looking for that oomph.