Facebook's (NASDAQ:FB) core business is thriving, with strong engagement for the company's namesake social network and its Instagram subsidiary driving impressive top- and bottom-line growth. Here's a look at how the momentum from the company's social networks translated to earnings performance last quarter: 

  Q1 2017 Q1 2016 Change
Daily Active Users 1.28 billion 1.09 billion 18%
Monthly Active Users 1.94 billion 1.65 billion 17%
Revenue $8.03 billion $5.38 billion 49%
Earning Per Share $1.04 $0.60 73%

Data source: Facebook.

With Facebook having since passed 2 billion monthly active users and management indicating that ad placement on the social network is near a saturation point, growth could be more difficult to deliver going forward, but the company is hardly resting on its laurels. The leader in social networking is working on initiatives that have the potential to create huge benefits for its core products and open up new business avenues down the line. 

Facebook's thumbs up logo on a sign at its headquarters.

Image source: Facebook.

VR as the next big computing platform

From the invention of the television through the rise of the mobile phone, the screen has been at the center of the information age, but dramatic changes for display technology could be on the horizon. Virtual reality (VR) got its first big commercial push in 2016 and currently has niche appeal, but Facebook is betting on the technology's potential and angling to play a leading role in bringing it to the mainstream. The social media giant's virtual reality push is probably the company's most well-known innovation investment, with its $3 billion acquisition of VR company Oculus generating lots of press and evidencing a clear enthusiasm for display innovation.

Facebook's Oculus Rift headset has gotten off to a somewhat disappointing start, with the device receiving a number of price cuts following weaker-than-expected sales and trailing HTC's competing Vive hardware, but CEO Mark Zuckerberg has reiterated a belief in VR as the next big computing platform and has his company working on a range of hardware and content initiatives that could lay foundations for the future of the tech.

Three avatars in the Facebook Spaces app.

Facebook Spaces; Image source: Facebook.

The company recently launched Facebook Spaces, a platform that allows users to create an avatar to hangout and share pictures and video in virtual chat rooms. It also recently partnered with Samsung for the release of the Facebook 360 app, bringing the social network's panoramic photo and video content to the Gear VR platform.

In 2016, Facebook committed a $250 million investment in VR content, and Zuckerberg has indicated that his company plans to invest an additional $3 billion over the next decade to improve VR and drive adoption. The company also has plans to develop augmented reality (AR) offerings far beyond the filters currently available on Instagram, stating in its most recent earnings call that it plans to invest aggressively in content and infrastructure to build its position in AR. These technologies have the potential to change the way the world sees and interacts with information, and, if they take off, they'll open up innovations opportunities in industries ranging from retail to healthcare.

Covering the world with internet

Facebook's Aquila drone flying and beaming internet.

Image source: Internet.org.

Facebook is working to bring free (or at least low-cost) internet to the world, a move that will dramatically expand its addressable market -- and one that could threaten internet service providers (ISPs) and wireless carriers. The company recently launched Express Wi-Fi, a partnership project with a group of ISPs in Africa and Asia to expand the reach of connectivity, and it's got even more ambitious plans in the works. Here's a Zuckerberg quote from Facebook's most recent earnings call about the progress the company is making with its internet-beaming airplane project:

On the connectivity side, in April we successfully simultaneously beamed 16 gigabits of data in each direction between a location on the ground and a Cessna aircraft circling more than 7 km away. Eventually, we're going to use this technology along with Aquila, our solar-powered plane we're building, to beam internet to parts of the world that currently don't have access. 

The company is also working on delivering internet by satellite. Of the roughly 7.5 billion people on Earth, roughly 3.7 billion are currently connected to the internet, so expanding the reach of network connectivity presents Facebook with huge growth opportunities. 

Building its position in the telecommunications field gives Facebook ways to sidestep data cap and throttling issues the company faces from international ISPs as well as domestic providers including Verizon, AT&T, and Comcast -- issues that could become more pronounced as the social network makes streaming video content a bigger part of its platform. For now, Facebook's efforts are concentrated on making the internet more globally accessible, but, in the long term, growing its provider capabilities could make it significantly less dependent on today's telecom leaders.  

Facebook's "6-Pack" switching hardware

Image source: Facebook.

Opening up network hardware

Facebook is also aiming to shakeup the network hardware space, and has been distributing designs for "white box" alternatives and partnering with manufactures to make them available for enterprise. These are made with non-proprietary parts and run on open-source software, and pose a significant threat to networking companies including Cisco Systems (NASDAQ:CSCO) and Juniper Networks because they offer levels of flexibility and customization beyond products from the current industry leaders. They also have the potential to dramatically reduce pricing power for routing, switching, and data center.

Increases in video streaming and the use of VR and AR technologies will put added pressure on data centers and increase costs for businesses. Facebook has an interest in facilitating these technologies, and reducing the expenses associated with networking hardware has the potential to remove a central roadblock to their progression. Lowering the costs of network infrastructure is also likely to play a big role in bringing internet connectivity to areas that are currently without it, so it's a disruptive initiative that could have huge payoff and pave the way for the evolution of the social network.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.