Thursday, May 01, 2014

Facebook earnings surge on mobile advertising.

Facebook earnings surge on mobile advertising

Facebook logo Facebook says that its growing mobile user base has helped it boost its advertising revenue

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Social networking giant Facebook has reported profits of $642m (£383m) during the first quarter of 2014, beating analyst expectations.
The firm said that a surge in mobile advertising helped push revenues 72% higher, to $2.5bn in the January-to-March period.
Mobile now makes up 59% of advertising revenue, from 30% a year ago.
Facebook also announced chief finance officer David Ebersman will be stepping down after five years at the company.
Mr Ebersman, who will remain with the company until September, said he plans to return to the healthcare industry.
He will be replaced by David Wehner, Facebook's vice president for corporate finance and business planning, and the former chief financial officer at games company Zynga.
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"Facebook's business is strong and growing, and this quarter was a great start to 2014," said founder and chief executive Mark Zuckerberg in a statement.
"We've made some long term bets on the future while staying focused on executing and improving our core products and business. We're in great position to continue making progress towards our mission."
Shares of Facebook rose as much as 4.3% in after-hours trading.
Mobile push


Facebook trounced Wall Street estimates last quarter in light of a hugely successful push into mobile.
This time around it has again outperformed expectations, driven by impressive ad revenue - the backbone of its business.
Looking ahead, the social network has a promising outlook on this front too. It is seeking to monetise its social photo-sharing service Instagram, and has already begun drawing in additional revenues from its recently-introduced video ads.
An extra boost would come from the launch of a rumoured soon-to-launch advertising network, to help it better compete against Google and Twitter for ad spend.
What these results don't reflect is the social network's acquisition of messaging service WhatsApp for a staggering $19bn, or its more recent $2bn purchase of virtual reality startup, Oculus Rift; neither deal has yet closed.
Although many remain unconvinced that Facebook will see a decent return on investment on WhatsApp (despite this week's news it now has 500 million users),
Facebook's diversification is a recognition that it needs to spread its risk and retain a broader portfolio as the growth in its core social network slows.
Mark Zuckerberg is keen to ensure that as other platforms emerge, his company is in pole position to capitalise.
The firm said it reached 1.28 billion users during the period, with more than a billion of those accessing the site through a mobile device, such as a smartphone or tablet.
The company has taken steps to further grow its mobile business - which barely used to generate any advertising revenue a few years ago - by expanding its product offerings.
This includes launching the Facebook Messenger service and news application Paper.
Facebook also bought photo-sharing application Instagram in 2012 and recently agreed to buy mobile text messaging service WhatsApp for $19bn.
As an increasing number of consumers switch to accessing services such as facebook on handheld or potable devices, spending on digital and mobile advertising is expected to rise even further.
According to research firm eMarketer, global digital ad spending rose 14.6% to $119.8bn in 2013.
It is estimated to increase another 14.8% this year to $137.5bn.
For mobile, global advertising grew 105% to about $18bn last year and is projected to grow another 75.1% this year to reach $31.45bn.
According to some forecasts, Facebook is expected to capture an even bigger slice of the mobile and digital advertising market this year, trailing only Google which accounts for the bulk of market share.

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