Facebook sees sharp drop in profits

Facebook has reported a sharp drop in profits, partly due to increased spending on research and development.

The social network site made a profit of $64m (£41m) in the final three months of 2012, compared with $302m a year earlier.

Revenue was up 40% at $1.6bn, largely due to a big jump in advertising revenue, a quarter of which came from mobile platforms.


Shares in Facebook fell by almost 6% in after-hours trading in New York.

The shares launched on the Nasdaq stock exchange in May at $38, and had halved in value by September.

They have since recovered to stand at $31 at the close of trading on Wednesday. The drop in after-hours trading suggests the shares will fall back again when full trading resumes on Thursday.

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