Facebook Struggles In Europe In 3Q

At one point during Facebook’s third-quarter earnings conference call, Chief Financial Officer David Ebersman mentioned that Europe has been a challenge for the social network. Based on the financial results released by the company Tuesday, Ebersman’s comment was an understatement.

Facebook broke out overall revenue, ad revenue, and revenue from payments and other sources by geographic region, and Europe consistently underperformed U.S./Canada, Asia, and rest of world, with unfavorable exchange rates mentioned during the earnings call as part of the issue.

In terms of overall revenue, Europe was the only region to decline in the third quarter of 2012 when compared with the second quarter, slipping to $341 million from $346. Revenue rose quarter-to-quarter in U.S./Canada ($637 million versus $590 million), Asia ($154 million versus $135 million), and rest of world ($130 million versus $113 million).

The story was similar for advertising revenue, where all regions showed gains, but Europe only rose $1 million, to $295 million from $294 million, while the figures were much higher for the other regions: U.S./Canada ($538 million versus $479 million), Asia ($133 million versus $115 million), and rest of world ($120 million versus $104 million).

Revenue from payments and other sources presented a mixed bag of results, with both Europe and U.S./Canada showing significant declines ($46 million from $52 million, and $99 million from $111 million, respectively), while Asia and rest of world each gained $1 million quarter-over-quarter, to $21 million and $10 million, respectively?

Readers: Aside from unfavorable exchange rates, why do you think Facebook is having a tough go of it in Europe?

Image courtesy of Shutterstock.

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