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Facebook revenue up 63 per cent thanks to massive increase in mobile advertising Facebook revenue up 63 per cent thanks to massive increase in mobile advertising
(about 14 hours later)
Facebook said on Wednesday its quarterly revenue jumped 63 percent to $2.59 billion, beating analysts’ expectations, as the social networking company was helped by a massive increase in its mobile advertising sales. Facebook kicked off the reporting season for US tech majors last night, beating forecasts with its fourth-quarter numbers thanks to its success in mobile advertising.
Facebook said total advertising revenue rose 76 per cent to $2.34 billion in the fourth quarter of 2013, and that mobile advertising revenue made up 53 per cent of that number, up from 23 percent in the year-ago period. Revenue at the social network jumped 63 per cent to $2.59 billion (£1.56 billion), ahead of analysts’ expectations.
Facebook chief executive Mark Zuckerberg told investors on a conference call that almost half the people who use Facebook now do so from their smart phones. Ad revenue rose 76 per cent to $2.34 billion, with mobile advertising income making up 53 per cent of that figure, up from 23 per cent in the year-ago period.
Zuckerberg said that while Facebook knows there is room for improvement in the quality of some of its advertising, more and more users reported a positive experience with its advertising and found it useful. Facebook said the US flash sales day Black Friday was its single-biggest mobile ad revenue day in the quarter.
“The mobile shift is happening and it's working really well for Facebook,” said Facebook’s chief operating officer Sheryl Sandberg. Ian Maude, a technology analyst at Enders Analysis, said: “They’re doing phenomenally well. Their mobile ad revenue has quadrupled from basically a standing start. All of that is really being powered by the mobile news feed ads, which is a new category really. The news feed ads really work.”
Facebook stock jumped about 10 percent to $58.88 in after hours trading. The company went public at $38 a share in 2012 but performed poorly in its first year of trading, well below its IPO price, only to stage a strong recovery in recent months. Chief executive Mark Zuckerberg told investors that the company was testing ads in Instagram and was also looking at the possibility of advertising within third-party apps.
Facebook said quarterly net income was $523 million, or 20 cents a share, up from $64 million or 3 cents a share in the year-ago period. Excluding certain items, Facebook said it earned 31 cents a share, up from 17 cents a share. Zuckerberg said almost half the people who use Facebook now do so from their smartphones, with monthly active users on mobile rising 39% to 945 million in the quarter.
Monthly active users (MAUs) of Facebook reached 1.23 billion as of December 31, an increase of 16 percent year-over-year – with mobile users rising 39 per cent to 945 million. Facebook’s number of monthly active users reached 1.23 billion in the quarter, up 16 per cent year-over-year, while daily user numbers hit 757 million on average in December, an increase of 22 per cent. Quarterly net income was $523 million, up from $64 million a year earlier.
Next week brings the 10th anniversary of when CEO Mark Zuckerberg founded Facebook while a student at Harvard University. The strong set of results sent Facebook shares up as much as 10 per cent in after-hours trading, while shares in fellow social networks LinkedIn and Twitter also rose on the news.
“Looking ahead, you can expect us to keep preparing for the future,” said Zuckerberg. “We make money to build better services.” Fellow US tech titans Google and Amazon report their quarterly results tonight.
Maude said: "The story for 2014 is all going to be about mobile. That’s not just true for Facebook, it’s true for all those in the digital sector. I would expect to see very strong growth in Google and Twitter’s number too.”
Google is cutting its losses on Motorola, selling the handsets maker to Chinese firm Lenovo for $2.9 billion just two years after paying almost $10 billion more than that for it.
The division has lost nearly $2 billion.