Facebook Mobile Ad Revenues Surge, But Profits Slump
After its initial public offering last year, some market watchers expressed doubts about Facebook's ability to generate mobile revenues – an increasingly important market, as consumers shift to access Internet services via smartphones and tablets.
Well, the social network's fourth quarter results show that around 23 percent of its total fourth quarter advertising revenue ($305 million) came from mobile. As CEO Mark Zuckerberg pointed out on the earnings call, a year ago those revenues were 0 percent.
Crucially for Facebook, the use of its network via mobile devices rocketed by 57 percent: with 680 million users accessing it via their smartphone or tablet in December 2012 – the first time mobile users had topped desktop users.
Facebook reported Q4 revenues of $1.59 billion, up from the year ago quarter of $1.13 billion. Meanwhile, annual revenues were up from $3.71 billion in 2011 to $5.09 billion in 2012.
The social network's growth was highlighted by its continued growth in its user base. The total number of active users in December reached 1.06 billion, up 25 percent compared to a year earlier.
Nonetheless, the costs of Facebook's emphasis on mobile has been clear. Profits at the social network have slumped. In Q4 2012, profits were down to $64 million compared to $302 million in the year-ago quarter – almost an 80 percent drop.
For its full year, profits at Facebook were down to $53 million compared to $1 billion for 2011.