The online-only fragrance retailer Phlur will sell samples of the scents, but marketing will rely heavily on images.
The social network’s revenue jumped nearly 45%.
Facebook Inc. generated average revenue of $1.21 per user in the first quarter, a 6% jump from a year earlier, according to an undated filing with the U.S. Securities and Exchange Commission.
The social network reported $1.058 billion in revenue in the first quarter of 2012, up 44.7% from $731 million during the same period in 2011. However, its first quarter earnings fell 12% year over year, to $205 million from $233 million. That’s due in part to the social network’s quarterly expenses rising to $677 million from $343 million a year earlier, as it spent heavily in preparation for its planned initial public offering by expanding its data center operations, hiring employees (the company headcount is up 45.6% year over year), and marketing its services to users, developers and marketers.
Facebook says the earnings decline also stems from an expected decline in advertising, the social network’s primary source of revenue, from the fourth quarter when the holiday season boosts advertising.
“We believe that this seasonality in advertising spending affects our quarterly results, which generally reflect strong growth in advertising revenue between the third and fourth quarters and slower growth, and for certain years a decline, in advertising spending between the fourth and subsequent first quarters,” the social network says in the filing.
Moreover, Facebook in February introduced a slew of new advertising options, including ads that appear on users’ log-out screens, mobile ads and Reach Generator, an algorithmic tool that determines the placement of ads, including Sponsored Stories—none of which are fully reflected in the first quarter earnings. Sponsored Stories enable advertisers to highlight posts or actions, such as when a consumer’s Facebook friend Likes a product, checks into a store, plays a game or uses a Facebook application.
Facebook also reported that its monthly active users increased to 901 million in the first quarter, up from 845 million in December; 488 million users interacted with Facebook on a mobile device, up from 425 million in December, and daily engagement increased to 3.2 billion Likes and comments a day, up from 2.7 billion in December.
Facebook calculates average revenue per user as its total revenue during a given period, divided by the average of the number of monthly active users at the beginning as well as the end of the period; that is why the average revenue per user doesn’t equal $1.058 billion (the Q1 revenue) divided by 901 million users.
Facebook also noted in the filing that its $1 billion acquisition of photo-sharing service Instagram was for 23 million shares of its common stock and $300 million in cash. That means the social network values its shares at $30.43 apiece.