Facebook Delivers Big Surprise: $646m Payoff By Mobile Biz

Written by Computer Daily News     26/07/2013 | 09:11 | Category: CONTENT & DOWNLOADS

SAN FRANCISCO - To the surprise of many critics, Facebook's mobile business appears to be booming. Delivering its Q2 report, the social network said that it made 41 percent of its US$1.6 billion advertising revenue, or roughly $656 million, from mobile connections.

Facebook Delivers Big Surprise: $646m Payoff By Mobile Biz

Overall the company posted results that exceeded estimates, sending Facebook shares up as much as 21 percent.

Second-quarter revenue rose 53 percent to $1.81 billion and net profit, excluding certain items, was $488 million. Analysts had predicted sales of $1.62 billion on average, according to data compiled by Bloomberg.

Concern about Facebook's ability to capitalise on the shift from personal computers to mobile devices has weighed on the company's shares since its $16 billion initial public offering last May, the largest technology IPO on record.

But CEO Mark Zuckerberg's efforts to focus the company on ads for tablets and smartphones is starting to pay off, according to Paul Sweeney, an analyst at Bloomberg.

"Finally, the blowout quarter that Facebook bulls have been waiting for," Sweeney said. "Among many impressive data points, I think investors will focus on the percentage of revenue from mobile of 41 percent, which was well above consensus."

Mobile will soon account for more than half of Facebook's advertising dollars, Zuckerberg said on a conference call. Mobile user numbers expanded 51 percent to 819 million during the quarter. The total number of Facebook members was 1.15 billion, compared with 1.11 billion in the earlier period.

Facebook aims to take 13 percent of the global mobile-advertising market this year, up from 5.4 percent last year, according to EMarketer. It would still remain a distant No. 2 to Google, which is expected to grab 56 percent.