Facebook Inc (FB) Earnings Call Transcript: 2014 Q3

Payments tend to be fixed fee because of the auction model there is really good price discrimination build in so a partner or businesses who are willing to pay us 30% of their revenue can bid that and someone is willing to only 5% can bid that and the auction model currently takes care of that. So, we think focusing on the ad part will end up to be the more effective thing for us to do but we realize that it is important for our partners to be a payment system which is why we are excited about partnering with credit card companies and partnering with PayPal and all of the different approaches of online payments to make their solutions as good as it possible, as well.

David B. Fischer, Vice President – Business and Marketing Partnerships, Facebook

Hey, Ralph! It is Dave. Just, you know, our view now is our Q4 revenue will come in that 40% – 47% every year – growth range. You know, as I mentioned Q4 2013 was absolutely fantastic quarter for us. We had news feeds rolled out at scale. It was our first billion dollar mobile quarter, so we are competing again just a really outstanding quarter last year. That is really the largest issue. You asked about currency. We did see the euro drop about 7% value over the course of Q3 and that really didn’t pick up, as you saw it, didn’t pick up an impact in Q3 at all because it happened at the end of the quarter. So, that will be ahead when we see that is factored into the guidance.

Operator

Your next question comes from Mark Mahoney from Abc Capital Markets. Your line is open.

Mark Mahoney, ABC Capital Markets

Great! Sheryl you talked about being careful and slow in rolling out the video ads, autoplay video ads and Instagram monetization. Have you seen any push back in terms of user experiences to date on video or video ads? Is that overall caution or is anything that you’ve seen in the data that suggests you want to keep it in that really slow pace?

Thank you!

Sheryl K. Sandberg, Chief Operating Officer, Director, Facebook

We are pleased of the consumer response we had on both friends and we remain really optimistic over the long run about Instagram and video because there is a lot of interest. I spoke about before about creative storytelling, images, video can be such a big part and you create a really resonant experience for brands and companies. We really believe in going slow that as we grow products we pay attention to consumer experience. We want the consumer experience always to come first so although we are very optimistic about the opportunity here we continue to go slowly and pay a lot of attention to the quality of the advertising we see. To share one example we are seeing people using both Facebook and Instagram and also video and other apps, products and combinations. Mercedes Benz launched the GLL which was their first compact SUV on Facebook and Instagram and they found that by doing Facebook and Instagram together they got a 54% increase in their website visit. So, a lot of our products as you do one you also do more Facebook ads, as well and that is something we are paying a lot of attention into.