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Facebook upbeat as rising mobile ad revenue headlines healthy results(Guardian (UK) Via Acquire Media NewsEdge) Facebook comfortably beat Wall Street expectations last night, announcing that its once-struggling mobile business now accounts for 62% of advertising revenues. "We had a good second quarter," said Mark Zuckerberg, Facebook's founder and chief executive. "Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world." Revenue for the quarter ending 30 June totalled $2.91bn (pounds 1.7bn), an increase of 61% over the $1.81bn reported in the same quarter of 2013. Excluding the impact of year-on-year changes in foreign exchange rates, Facebook said revenue would have increased by 59%. The internet business announced net income of $791m for the latest quarter, up 138% compared with $333m for the same period last year. The number of Facebook's monthly active users reached 1.32 billion as of 30 June, an increase of 14% year on year. The number of daily users was 829million, up 19% year on year. Facebook said the number of mobile users topped 1.07 billion at the end of June. Zuckerberg said people in the US spend nine hours a day on digital media, but less than an hour on Facebook. "One thing that's exciting is there is still so much room to grow," he said. Advertising revenue rose 67% to $2.68bn compared with the same quarter last year. Doubts about Facebook's ability to make money from adverts on mobile, the fastest-growing area for the company, were a major factor in the company's embarrassing share price collapse after its initial public offering in May 2012. Mobile ads now account for 62% of ad revenue, up from 41% for the same quarter last year. Research firm eMarketer calculates that Facebook accounted for 5.8% of worldwide digital advertising revenues in 2013, up from 4.10% in 2012. It is expected to reach nearly 8% by the end of this year. Digital advertising spending globally increased 14.8% to $120.1bn in 2013 and is expected to reach $140.2bn this year. Facebook is almost entirely reliant on advertising for revenues. Payments and other fees totalled $234m in the quarter, a 9% increase from the same quarter last year. But there are signs it is looking to broaden its income streams by adding more e-commerce. Earlier this month Facebook announced the introduction of a "buy" button that will allow users to buy items in adverts or other posts without leaving the social network. The chief operating officer, Sheryl Sandberg, said the buy button was a "small experiment." Melissa Parrish, an analyst at Forrest Research, said the results were impressive but she was keen to see how Facebook would differentiate itself from other advertisers. "Mobile advertising is potentially really interesting," she said. "At the moment it's ads that get you to click to download other people's apps. That makes sense but there are only so many apps people want to download." Caption: 62% The proportion of Facebook's advertising revenues accounted for by its once-struggling mobile business (c) 2014 Guardian Newspapers Limited. |