As the internet company’s mobile ad sales continued to accelerate Facebook Inc delivered its strongest revenue growth in two years, beating Wall Street targets.
On 29th January 2014, Facebook shares increased 12 percent to USD 59.98 in after-hours trading.
The world’s largest social networking company, Facebook said that the revenue from mobile ads represented USD 1.24 billion or 53 percent of its total advertising revenue in the last three months of the year, versus the 49 percent proportion that mobile ads represented in the third quarter.
According to an analyst at Sterne, Agee & Leach Group Inc, Facebook has cracked the code on mobile phone and within a little over a year’s time mobile has taken over desktop in terms of ad revenue.
Facebook said that it at present it has 1.23 billion monthly users, with 945 million accessing the service on a tablet or smartphone.
Facebook’s newsfeed ads, which inject paid marketing messages straight into a user’s stream of content and news, have boosted Facebook’s stock price and its revenue in recent months. The advertisements are ideally suited for the smaller-sized screens of tablets, smartphones and other mobile devices.
The company said that the average price per ad on Facebook has surged 92 percent in 2013, even though the total number of ad impressions on Facebook declined 8 percent.
Mark Zuckerberg, the Chief Executive Officer of Facebook said that the focus of moving forward was to improve the relevance and quality of the newsfeed ads, rather than boosting the number of advertisements in users’ newsfeed.
Zuckerberg added that the company would focus on improving Facebook’s nascent search product and on creating new standalone products.
In 2013, the overall revenue in the fourth quarter rose to $2.585 billion as compared to $1.585 billion in 2012 and above the $2.33 billion expected by analysts.
According to Ebersman, the expenses in the coming year would probably increase approximately to 35 percent to 40 percent.
Facebook reported net income of 20 cents a share or USD 523 million, versus 3 cents a share or USD 64 million in 2012. According to Facebook, it has earned 31 cents a share, defeating the analysts’ expectations of 27 cents per share.