Facebook profit soars, stock scheme cements Zuckerberg's control

When you think of wacky and innovative tech companies, Google is usually the first to come up. But Facebook is quickly becoming second.

More people in Silicon Valley are talking about how Mark Zuckerberg is transforming Facebook from a way to share baby photos and updates about what we ate for breakfast to a company that wants to be an even bigger part of our lives. That's kind of like Google, which started life as a search engine and now makes phone software, autonomous cars and contact lenses that double as health sensors.

In the past two years, Facebook spent at least $2 billion to become a leader in virtual reality. In March, it started selling $599 Oculus Rift goggles that strap a screen so close to your face you'll believe the computer-generated worlds you're seeing are real. Facebook is also becoming such a vocal part of artificial intelligence research that Zuckerberg pledged to spend 2016 inventing an AI to manage his work and home. The company is also building Internet-beaming drones that fly over and capture images from remote parts of the world.

If you look at Google's list of research projects, there's a lot of overlap. The search giant just said it taught an AI system how to play the ancient board game Go. Facebook taught an AI system to answer test questions about J.R.R. Tolkien's book series "The Lord of the Rings." Facebook has Internet-beaming drones. Google has Net-beaming high-altitude balloons. Facebook is trying to speed up Internet networks. So is Google with its Fiber broadband service. Google also makes VR devices.

Facebook even announced Wednesday a new stock scheme that will create a new class of shares (something Google did as well). Facebook's board said the new plan will "allow us to remain focused on Mr. Zuckerberg's long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook."

See the trend?

Facebook wants to make sure this trend continues too. In March, Zuckerberg said the company had poached one of Google's rock star execs, Regina Dugan, to head up a new hardware lab called Building 8. Dugan was once the chief of DARPA, or the Defense Advanced Research Projects Agency, a government group that develops emerging tech for the military. At Google, she led the Advanced Technology and Projects group, or ATAP, which is working on Internet-connected fabrics and phones with interchangeable parts you can snap on like Legos. (And let's not forget that Sheryl Sandberg, the company's famous COO and Zuckerberg's number two, also came from Google.)

Overall, it's a good day to pay attention to Facebook, which reported earnings that blew past Wall Street's expectations and sent the shares soaring. In the three months ended March 31, Facebook tallied 77 cents per share in profit, after adjustments for costs like stock-based compensation. Sales jumped more than 50 percent to $5.4 billion. Analysts were looking for profit of 62 cents a share on sales of nearly $5.3 billion.

Facebook's shares rose more than 7 percent in late trading.

"Facebook has been built by a series of bold moves," Zuckerberg said on a conference call with analysts. "Big bets on acquisitions like Instagram that were very controversial initially but were good decisions for our community and our business."

"And when I look out at the future I see more bold moves ahead of us than behind us," he added.

More sharing, more video

One key to Facebook's growth has been sharing, be it articles, videos or photos. Sharing and engagement, in whatever form they take, is an important metric to the company's executives.

"We're focused on providing the best tools to allow people to share in whatever way they wish to share," David Wehner, Facebook's CFO, said in an interview. That's part of why the company has purchased so many seemingly disparate companies over the years, be they the Instagram photo-sharing service or the WhatsApp texting service.

In the end, it's about giving people a way to communicate, he said. And in that, "there's a lot of room to grow."

One of the newest ways the company is expanding sharing is through its Facebook Live video effort, which allows anyone to shoot and share live video streams to Facebook from a phone at any time. So far, media organizations have been among the most active on the service, but Wehner said the company will continue to invest to see more people use it. "We think there's a great opportunity for people to share, not just news organizations," he said. "We've got the best live product out there."

Facebook said people are sharing and creating nearly three times more video than they were a year ago. As of February, people are spending 40 percent more time watching videos on Instagram than they were late last year. "Overall sharing is up across Facebook and people are spending more time on Facebook and the whole family of apps," Zuckerberg said on the conference call.

At its heart, Facebook still primarily relies on ads for the bulk of the money it makes. And of the $5.2 billion that Facebook rings up from ads, those shown on mobile devices represented 82 percent of its total haul, according to Wednesday's earnings report. Nearly 92 percent of the 1.65 billion people who access the service at least once a month do so using a mobile device. On a daily basis, mobile readers represent nearly 91 percent of Facebook's 1.09 billion users.

CNET's Richard Nieva contributed to this report.