Facebook: A look at where it's placing its bets

Data centers, ad tech and people are gobbling up Facebook's ambitious capital spending plans for 2015.

Facebook plans to spend $2.7 billion to $3.2 billion on capital spending in 2015, up 50 percent to 60 percent from a year ago. In addition, Facebook will be busy hiring for research and development roles.

The company's investments are going to data center capacity, mobile ad platforms, people and areas such as Oculus and Internet.org. Facebook zeroed in on where it's spending following a first quarter that was solid, but dinged by a strong dollar.


Here's a look at the places where Facebook is putting its cash.

Data centers. The Messenger platform supports more than 10 percent of the voice over IP calls globally. Other apps such as Instagram, which has more than 300 million active users, and WhatsApp, which has 800 million users, also need compute.

CEO Mark Zuckerberg said:

Over time, we expect people to share richer content with an increasing frequency, so we want to continue developing new and better tools to facilitate this expression.

Those tools are going to need computing power. The explosion of video on Facebook will also require more infrastructure. Facebook noted that 2015 will be a big spending year on infrastructure.

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Ad platforms and algorithms. Facebook is working the mobile advertising front since it sees an opportunity to trump Google. Sheryl Sandberg, operating chief of Facebook, said the company is looking to spend money on tools and better ad targeting. Sandberg noted:

Mobile continues to be a great opportunity for us. People continue to be highly engaged with our mobile apps. In the United States for example, Facebook and Instagram get more than one out of every five minutes spent on mobile. As consumers shift to mobile, businesses are following and we're focusing on helping them take advantage of this opportunity to use mobile to build their businesses.

Facebook has rolled out a new mobile Ads Manager to target campaigns. Facebook is also looking at video although execs didn't outline monetization findings.

Sandberg also zoomed in on ad targeting and retargeting as users hop from Facebook apps to Facebook and have campaigns follow them. Facebook is also continuing to work on targeting to custom audiences and tracking conversions.

As for the numbers, Facebook said mobile ad revenue was $2.4 billion in the first quarter, up from $1.3 billion a year ago. Revenue from ads served on a desktop fell 4 percent.

People. Facebook topped the 10,000 employee mark for the first time and anticipates that the hiring will continue. Facebook had 10,082 employees, up 48 percent from a year ago.

Dave Wehner, CFO of Facebook said:

I would say our headcount growth has skewed towards the R&D side because a lot of these initiatives have long term development needs, so we've been investing there, but we are investing across the board.

Acquisitions will also boost Facebook's employee count.