Facebook Inc (FB) Earnings Call Transcript: 2014 Q3

Page 2 of 20

Over the next 3 years our main goals are around continuing to grow in third our existing community and businesses and help them reach their full potential. When you look at the size of engagement in our community, our progress remains very strong. 864 million people use Facebook every day and across our core product we continue to see huge engagement. For example around 700 million people now use Facebook groups every month. Achieving the scale shows that we are delivering experiences for the way people want to share and connect. Another example is our progress on public content. Last quarter I talked about how we are working to connect people around important public moments and personalities on Facebook. This quarter we continue to build on our result and there are now more than 1 billion interactions every week between public figures and their fans on Facebook. The investments we made in video have also played a big part in here. This quarter we announce a new milestone for video on Facebook achieving 1 billion video views a day made by videos. During the summer I spoke at Challenge. There are more than 10 billion video views by 440 million people which is a good sign of how far our video product has come.

Instagram has also made a lot of progress this quarter. In August the Instagram team launched hyper lapse – a standardized app for time lapse videos on iOS. The team has also invested heavily in improving the speed performance of Instagram on Android. This is help drive Instagram strong international growth which in some countries is achieved more than 100% year over year growth. Globally people using Instagram now spend there 21 minutes a day on average using the app. This is a strong figure compared to the industry and a good sign that Instagram strategy is on the right path.

Our other big focus over the next three years is to continue serving businesses well and creating a lot of value for marketers. As the result show, our approach here is working. To continue delivering value for businesses we worked to improve the quality of apps and news feed by reducing low quality content and improving our targeting to show more timey relevant content. We’ve also made some big advances in our app tag – most importantly the launch of our new Adlesse platform. Adlesse offers marketers a lot of new capabilities to help reach people across devices, platforms and publishers, as well as improve measurement of online campaign. We are very excited for the future of Adlesse and Sheryl is going to talk about this in a moment.

Next, let’s talk about our strategy over the next five years. Over the next 5 years our goals are on taking next generation of services – Instagram, Messenger and WhatsApp and search and helping them connect billions of people and become important businesses in our own right.

One big priority for us is messaging and continuing to build and grow Messenger and now WhatsApp as well as great services. This quarter we made an important change to our mobile messaging efforts by transitioning people to Messenger on iOS, Android and Windows phone. We believe that this change allows us to offer better and faster messages on mobile and our data show that people who use Messenger usually respond to messages about 20% faster. This month we also completed our acquisition of WhatsApp. I am excited be working with their team and for Jan to join our Board. WhatsApp continues to be on a path to connect more than a billion people around the world and we are going to be working to accelerate their efforts here.

Page 2 of 20