Part of the reasoning, the company said, is that Facebook's ongoing plan to make money from Messenger, which has more than 1.2 billion global monthly users, has so far failed to make inroads quickly enough to offset slowing ad revenue growth elsewhere on the service. The company reported advertising revenues of $9.1 billion in Q2 2017 in comparison to 6.2 billion in the same quarter previous year, a 47% growth.
Facebook with $9.2b revenue, exhibited twice the growth as that of Google in ad sales but it might have hit a ceiling and need more ad space.
During the quarter, daily active users (DAUs) were 1.32 billion on average for June 2017, an increase of 17% year-over-year.
Alphabet on Monday reported a 21 per cent increase in quarterly revenue, although it started the quarter from a larger base than Facebook did.
When Facebook bought WhatsApp in 2014, its CEO Jan Koum promised users there would be "absolutely no ads interrupting your communication". "Our first priority is helping businesses leverage the power of mobile", reiterating that companies need to reach consumers where they are, which is commonly in the content streams of apps like Facebook, Instagram, and even WhatsApp.
Headcount - Headcount was 20,658 as of June 30, 2017, an increase of 43% year-over-year. Wall Street had been looking for 1.98 billion monthly active users, so Facebook has come out ahead of the consensus as provided by StreetAccount. Through Wednesday's close, the share price had climbed almost 44 percent this year.
Facebook is expected to generate $36.29 billion in net digital ad revenue this year, a 35% jump from 2016, according to the research firm eMarketer.
Facebook's biggest focus is on helping brands take advantage of mobile advertising, Sandberg said.
The average price of an ad rose 24 per cent, Chief Financial Officer David Wehner said on a conference call with analysts after the results were released. Expenses could grow as Facebook continues to invest in areas like video.
Facebook, along with Google, takes the lion's share of online advertising revenue - 99% of all new dollars spent past year, according to Pivotal Research. The vast majority of that comes from mobile advertising, which went from 84 percent to 87 percent of total revenue.
"I expect AI to change the way we do business", he said.
Besides, the company said, there are 1 billion videos and 4.5 billion photos shared through its platform on a daily basis. Those include apps like Instagram, WhatsApp and Messenger, two of which have more than a billion users.
Facebook faces competition from Snapchat, a platform particularly popular amongst young social media users, which pioneered the idea of "stories", a series of messages aimed at a wider audience that lasts for 24 hours.