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What To Watch During Facebook's Q4 Earnings Report

Here's what's on our radar as Facebook reports its fourth-quarter earnings on Wednesday.

What To Watch During Facebook's Q4 Earnings Report
[Photo: courtesy of Facebook]

On Wednesday, Facebook will update investors on its latest quarterly earnings. During the company's last report in November, CEO Mark Zuckerberg revealed that Facebook was clocking over a billion users per day and 1.55 billion monthly active users, the majority of whom access Facebook through smartphones and tablets.

Though stock prices have taken a hit of late, Facebook's investors likely have little reason to worry about its Q4 earnings, given the company's dependable revenue and user growth since its IPO in 2012. The bigger question: What is on Facebook's agenda for 2016? Here are the things Fast Company is watching for in this week's call:

1. Free Basics

Facebook's swelling user base is largely correlated with efforts to bring its service to emerging markets. The company's exponential user growth has stemmed, for the most part, from markets outside of the U.S. and Canada. Free Basics, an app that provides access to Facebook and other services for free in select developing countries, has been a major driving force behind Facebook's expansion—but recent pushback from Indian regulators could limit its influence in the country.

Since December, Free Basics has been temporarily banned in India, where it has faced ongoing criticism since its inception due to its alleged violation of net neutrality, which promotes an open Internet. (The idea being that Facebook should not dictate the content that is made accessible to Indian people.) Zuckerberg has been vocal in his support for Free Basics, going so far as to pen an opinion piece in the Times of India recently, so he may comment on this issue during the investor call on Wednesday.

2. Oculus & Video

At long last, Facebook-owned Oculus announced earlier this month that it was finally releasing Rift, its Kickstarter-funded virtual reality headset, in March. (The $600 headset has been available for pre-order since January 6.) It's unclear what Facebook will share about its plans for Oculus in the coming year, but the company is betting big on virtual reality—an ambition that has already manifested itself in 360-degree videos that Oculus helped introduce to Facebook in the fall.

More recently, the company rolled out live video streaming to all users, a feature that was previously only available to celebrities and other high-profile users. During its third-quarter earnings report, Zuckerberg said that each day, 500 million users watch 8 billion videos on Facebook—a number that has to have grown since, especially as the social network has been testing a dedicated video section.

3. Instagram, WhatsApp & Messenger

Through its acquisitions of Instagram and WhatsApp, Facebook has secured swaths of users around the world—75% of Instagram users are outside of the U.S.—but the company has yet to make public any numbers that point to monetization on those platforms. "Nine hundred million people use WhatsApp, and that’s an important part of the whole ecosystem now," Zuckerberg disclosed in Fast Company's recent cover story. "Four hundred million people use Instagram, 700 million people use Messen­ger, and 700 million people use Groups. Increasingly, we’re just going to go more and more in this direction."

Instagram, for its part, has upped its ad game and, as Re/code reports, its advertising appears to be paying off in views for at least one ad partner. Messenger, the standalone app that grew out of Facebook's chat feature, has morphed into a formidable platform of its own, with the addition of a digital assistant called M and e-commerce capabilities that could eventually become a revenue source for the company. And WhatsApp axed its annual $1 subscription fee last week, in favor of bankrolling its operations with a personal assistant similar to M. Will Zuckerberg finally lift the curtain on Facebook's suite of apps? We'll have to wait and see on Wednesday.

Facebook will present its earnings report in a webcast at 2 p.m. PST on Wednesday. Stay tuned for our coverage tomorrow.

Read more about Zuckerberg's roadmap for Facebook in our November cover story.

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