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October 29, 2014

Facebook shares fall following hiked spending announcement

Despite impressive Q3 results, Facebook says spending will damage revenues.

By Ben Sullivan

Facebook has said it will be increasing its spending which could affect revenues in the next quarter

The news sent shares in the social network southbound by 10% in after hours trading, directly following the firm’s announcement that expenses will rise 75% next year.

Facebook’s third quarter revenues were $3.2bn (£1.98bn), however, ahead of analysts’ predictions.

Facebook CFO Dave Wehner said that the firm us preparing for a 55-75% rise in expenses next year, where it will be investing in acquisitions such as Whatsapp, Oculus and services which have yet to be announced.

Wehner said: "We believe that we have very substantial growth opportunities in front of us and we plan to invest aggressively to capitalise on those opportunities."

The firm also witnessed a 90% profit increase over the same period in 2013, reaching $806m.

This growth was propelled by Facebook’s advertising business, with its mobile adverts accounting for 66% of its total advertising revenue.

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