Facebook profit climbs 58pc on mobile ads

FACEBOOK'S profit in the first quarter of this year rose as it challenged Google and Apple for revenue from mobile ads and apps.

Mobile advertising helped Facebook boost its first-quarter profit by 58 per cent from a year ago to $US217 million ($212.08 million) and to lift revenues beyond market forecasts, in results released overnight.

Facebook said its monthly active users rose 23 per cent from a year ago to 1.11 billion, including 751 million who accessed the network on mobile devices.

Mobile ads accounted for 30 per cent of advertising revenue for the quarter. The profit was just below market forecasts but revenues were better than expected, rising 38 per cent from a year ago to $US1.46 billion.

"We've made a lot of progress in the first few months of the year," said Facebook chief executive Mark Zuckerberg. "We have seen strong growth and engagement across our community and launched several exciting products."

Company highlights included the launch of Facebook Home software, which puts the social network centre stage on Android-powered smartphones, and the launch of a set of new ad products.

Facebook's share of the overall US online advertising market is expected to rise to 6.5 per cent this year from 5.9 per cent in 2012, according to industry tracker eMarketer.

The overall US digital ad market meanwhile surged 14.8 per cent to $US9.64 billion in the first quarter of this year, it reported. Spending on advertising on mobile devices in the United States is expected to rise to $US7.29 billion this year, with Facebook's share growing to 13.2 per cent, eMarketer said.

A key question for Facebook is its Home software suite for mobile phones, which received a lukewarm response. The software weaves the social network into the homescreen of phones powered by the latest versions of Android to focus on "people and not apps".

As of today, Google's online Play shop indicated that Home had been downloaded fewer than 15,000 times and its overall rating was two stars on a five-star scale.

"Good start/idea but it needs more options and features," one Home user said in a review.

The software, which allows users to see Facebook's Cover Feed when they turn on their phones, became available for download in the US on April 12. It should be available in Europe in the coming months.

"This is just the first release," Mr Zuckerberg said. "Over the next few months we hope to push this out much more broadly."

Facebook aims to improve the quality and targeting of ads shown to members connecting from smartphones or tablets. The strategy includes using Facebook as a platform for the distribution of third-party apps from Apple's App Store or Google Play.

"Facebook should be a place you can come to spread your apps," Mr Zuckerberg said. "Think how big an opportunity mobile apps can be for Facebook."

Facebook last week revealed that it was buying Parse, a startup specialising in powering mobile applications, as part of its drive to make the social network friendlier to smartphones and tablet computers. Online reports valued the deal at $US85 million.

View the original article here

Dollar back below US103 cents

THE Australian dollar fell a quarter of a US cent after the release of weaker-than-expected building approvals figures.

At 11.30am AEST today, the Australian Bureau of Statistics announced approvals for the construction of new homes fell 5.5 per cent across Australia in March, a weaker result than the market was expecting.

By 11.35am AEST the currency was trading at 102.45 US cents, down from 102.69 US cents just before the data's release.

View the original article here

Shares lower at noon

Good news for Aussie investors while the S&P 500 in the US closes at a record high.

AUSTRALIAN stocks are weaker at noon as investors book profits following the release of soft manufacturing data in China.

China manufacturing activity in April slowed slightly from the previous month in a sign of further weakness in the world's second-biggest economy.

IG Markets analyst Evan Lucas said the Chinese figures were relatively benign, while locally there had been light trading as most Asian markets were closed.

"There has been a bit of profit taking as well," Mr Lucas said.

Resources stocks were weaker. BHP Billiton was down 55 cents, or 1.68 per cent, to $32.15; Rio Tinto fell $1.00, or 1.79 per cent, to $54.80; and Fortescue Metals dropped five cents, or 1.43 per cent, to $3.45. Newcrest Mining, the nation's largest goldminer, shed 37 cents, or 2.2 per cent, to $16.44 despite gold prices recovering.

Mr Lucas said mining giants BHP Billiton and Rio Tinto had been punished in London overnight following falls in most commodity prices.

"That's why they're off."

The major banks were mixed after three of the four reached record intra-day highs yesterday.

National Australia Bank was flat at $34.00; Commonwealth Bank dropped 28 cents to $73.17; ANZ lost four cents to $31.79; but Westpac gained 13 cents to $33.92. Telstra was one of the few bright sparks, trading at an eight-year high, as nervous investors looked for strong yields. Its shares were two cents, or 0.4 per cent, higher at $5.00.

Making news, funds manager BT Investment Management said it had doubled its first half net profit thanks to a lift in global markets. Its shares are up 15 cents, or 4.27 per cent, at $3.66, at 12.42pm AEST.

And, ASX said its statutory profit after tax was up 1.7 per cent to $260.7 million in the first nine months of the year, according to unaudited figures. Its shares were up 29 cents at $37.89. The Australian share market gained 4.53 per cent in April but it has fallen in May for the last three years.

KEY FACTS

* At 12pm AEST today, the benchmark S&P/ASX200 index was down 20.7 points, or 0.39 per cent, at 5170.8 points.

* The broader All Ordinaries index was down 21.9 points, or 0.43 per cent, at 5146.6 points.

* The June share price index futures contract was seven points lower at 5161 points, with 10,783 contracts traded.

* National turnover was 962 million securities worth $1.6 billion.

View the original article here

Mining boom to leave gap in growth

We have lived through a period of historically high terms of trade, with strong mining investment and economic growth, yet we have seen four years of negative cash balances amounting to an accumulated $172 billion in budget deficits. Picture: AP/BHP Billiton Source: AP

THE Australian economy faces a pothole in economic growth because non-mining investment is not adequate to fill the gap left by the fast-fading resources investment boom, an independent forecaster warns.

The total value of investment projects across the nation fell by $24.7 billion in the first three months of the year to $928.9 billion, says Deloitte Access Economics in its latest Investment Monitor.

After several years of booming activity, mining investment now stands just 0.8 per cent higher than a year earlier.

"It is difficult to shy away from the conclusion that Australia's high growth component of investment will soon be fading, with little prospect of an equivalent alternate investment driver coming through," Deloitte Access Economics partner David Rumbens says in the report.

"That's a bit like having Usain Bolt lead out your relay team, passing off to Homer Simpson for the second leg."

The value of definite projects - under construction or committed - rose by 1.5 per cent in the March quarter to a total $451.6 billion, the report released today shows.

But the value of planned projects - under consideration or possible - in the forecaster's database dropped 6.2 per cent to $477.3 billion.

Back in December, the forecaster predicted the outlook for mining investment depended on whether the green light was given in 2013 for the top 10 pending projects.

"With a quarter of the year gone, the largest of these - Woodside's $43 billion Browse LNG project - has been shelved, and the remaining nine seem no closer to going ahead," Mr Rumbens said.

Otherwise, large LNG projects continue to dominate the investment program with the value of oil and gas projects under way in excess of $200 billion.

Mr Rumbens believes there is potential growth for infrastructure investment that supports mining production, such as railways, port projects and electricity.

But he thinks other investment is likely to be steady rather than achieving much growth.

He says non-resources manufacturing investment has all but dried up, with little prospect of a resurgence while the high Australian dollar hurts the sector's competitiveness.

Non-residential building projects are also showing little signs of life, with new approvals still below the peak seen prior to the 2008-2009 global financial crisis.

"Low interest rates will provide support but the overall environment for office and retail demand still remains somewhat dour," Mr Rumbens said.

View the original article here

Rates could drop under Medicare levy

The Gillard government has confirmed workers will face a tax increase through the Medicare levy to fund the National Disability Insurance Scheme

The RBA could cut interest rates if the Medicare levy rises. Source: AP

The RBA could cut interest rates if the Medicare levy rises. Source: AP

ECONOMISTS and tax specialists have warned the RBA may have to cut rates to offset the impact of a Medicare levy hike and that governments may adopt levies to fund future promises.

University of NSW taxation professor Neil Warren said Australia had a history of levies and the latest proposed hike could set a precedent.

''We have a long history of this from a milk levy, a sugar levy, levies on guns, a flood levy,'' he said.

''What is different is this goes on forever, we get a little concerned about this because the history tells us from an economics point of view they have such good political consumption, people go 'oh well, it is going to a good cause', governments tend to over use them.''

He said the Medicare levy already only funded a fraction of the nation's medical costs.

AMP chief economist Shane Oliver said the levy proposal was a lesson that proposals such as the NDIS needed to be funded somehow and it was a ''community judgment'' that DisabilityCare was needed.

''If you want something you have got to pay for it. It is a community judgment if we want the NDIS, we have got to pay for it,'' he said.

He said the levy rise was an effective income tax hike at a time when the economy was sluggish.

For a person earning $100,000 with a $250,000 he said the hit was the equivalent of a 0.25 per cent rate hike and the impact on household spending could prompt the RBA to drop rates.

Mr Oliver said hopes household spending would rise to stem the affects of the slowing mining boom could be ''jeopardised to some degree''.

University of Technology tax lecturer Adrian Raftery said raising the Medicare levy from 1.5 to 2 per cent to cover the National Disability Insurance Scheme could set a precedent.

''What is going to happen in five years time or ten years time when you have five new policies are you going to continue to put half a per cent on the Medicare levy?'' he said.

View the original article here

Dollar back below US103 cents

THE Australian dollar has dropped back below 103 US cents for the first time in three days amid falls on US stock markets and weaker commodity prices.

At 7am AEST today, the currency was trading at 102.78 US cents, down from 103.54 US cents yesterday afternoon.

HiFX senior trader Stuart Ive said The Australian dollar lost more than three quarters of a US cent overnight amid negative sentiment surrounding weaker-than-expected economic figures out of the US and China.

Official Chinese figures, released on Wednesday, showed that the country's key manufacturing sector grew at a slower pace in April while manufacturing and employment data released in the US overnight also disappointed markets.

"That has all weighed on the Australian dollar," Mr Ive said.

The negative sentiment saw New York sharemarkets lose almost one per cent while gold and copper prices also fell.

Mr Ive said the release of another set of Chinese manufacturing figures, from banking giant HSBC, would be the main driver of the Australian dollar during today's local session.

But, he said, the currency could push back above 103 US cents again during morning trade.

"I think we could probably edge back towards 103.10, but I don't see us going much further than that."

View the original article here

Medicare costing $250 more under Labor

There is speculation the Labor Government will increase the Medicare levy by 2 per cent in the May budget. Source: News Limited

THE average Medicare levy has grown by nearly $250 to $1120 under Labor - and much faster than during the Coalition's reign.

Amid speculation the levy will be increased to 2 per cent, the Australian Taxation Office published new statistics yesterday showing 8.66 million people were charged a combined $8.47 billion for Medicare - an average of $978 - in 2010-11.

Treasury has estimated the Medicare levy will reap $9.7 billion this financial year, pushing the average contribution to $1120.

This assumes the number paying the levy remains steady - it has risen and fallen slightly in previous years.

In 2007-08 - the financial year Kevin Rudd won government - the average was $872.

That means the average Medicare levy has increased by $248 since Labor came to power five and a half years ago.

Under the 11 years of the previous Coalition government, the average rose by $360 - just 45 per cent more for double the length of time.

Treasury forecasts the Medicare levy will raise $10.4 billion next financial year - $700 million more than 2012-13.

It upgraded its estimate by $150 million in November 2012.

Data from the Government's Australian Institute of Health and Welfare (AIHW) shows out-of-pocket expenses have increased considerably under Labor.In 2007-08, payments by individuals accounted for 16.8 per cent of all health expenditure.

In 2010-11 - the latest available figures - the figure was 18.3 per cent, higher than at any time under John Howard, according to AIHW figures.

Under Labor, health costs have risen 31 per cent, according to the Australian Bureau of Statistics, while medical and hospital services have become 41 per cent more expensive.

In the preceding 11 and a half years of Coalition rule, health costs rose 50 per cent.

Medical and hospital services became 57 per cent more expensive.

And while private health premiums have been rising at twice the pace of inflation recently, the office of Health Minister Tanya Plibersek said: ''This year's average increase of 5.6 per cent remained well below rises when Tony Abbott was minister for health, which peaked at 7.96 per cent and averaged 6.44 per cent.''

However, it was Labor that removed the private health insurance rebate for more than two million Australians last year.

Ms Plibersek's spokesman said bulk-billing rates for GP services were at an equal record high, with 82 per cent of consultations free in the final three months of 2012.

''This is in stark contrast to when Tony Abbott was health minister when bulk billing rates hit rock bottom at just 67 per cent,'' Ms Plibersek's spokesman said.

The government is considering raising the medicare levy to pay for the NDIS.

View the original article here