Face­book mo­bile ad rev­enue con­tin­ues to surge


Nearly three-quar­ters of Face­book’s ad­ver­tis­ing rev­enue now comes from mo­bile ads, as many more users ac­cess the so­cial net­work on smartphones and other hand-held gad­gets.

On that front, the com­pany is do­ing fine — bet­ter, even, than it has in pre­vi­ous quar­ters. But the rate of its over­all rev­enue growth slowed in the first three months of this year, caus­ing its high-fly­ing stock to tum­ble af­ter the re­sults came out.

Wed­nes­day marked the first time since early 2013 that Face­book failed to top Wall Street’s ex­pec­ta­tions with its re­sults, and shares of the Menlo Park, Cal­i­for­nia, com­pany fell more than 2 per­cent af­ter-hours trad­ing.

Face­book has grown mo­bile ad rev­enue steadily since 2012, when it started show­ing ads for the de­vices’ smaller screens. In the pre­vi­ous quar­ter, mo­bile rep­re­sented 69 per­cent of to­tal ad­ver­tis­ing rev­enue.

The so­cial net­work had 1.44 bil­lion monthly ac­tive users as of March, up 13 per­cent from a year ear­lier. The num­ber of users who ac­cessed Face­book on mo­bile de­vices at least once a month grew 24 per­cent to 1.25 bil­lion.

Face­book’s share of the US$42.6 bil­lion world­wide mo­bile ad­ver­tis­ing mar­ket was 17.4 per­cent last year, ac­cord­ing to re­search firm eMar­keter, up from 16.4 per­cent a year ear­lier. In com­par­i­son, Google’s share was 38.2 per­cent, down from 46 per­cent a year ear­lier.

The com­pany re­ported ad­justed earn­ings of 42 cents per share in the Jan­uary- March quar­ter, above the 41 cents per share that an­a­lysts polled by Fac­tSet were ex­pect­ing. Rev­enue in­creased 46 per­cent to US$3.54 bil­lion, from US$2.5 bil­lion a year ear­lier. An­a­lysts had ex­pected US$3.56 bil­lion.

Net in­come de­clined as Face­book’s ex­penses grew 83 per­cent from a year ear­lier. The com­pany earned US$512 mil­lion, or 18 cents per share, down 20 per­cent from US$642 mil­lion, or 25 cents per share.

Face­book, which bought the popular photo-shar­ing app Instagram and the mes­sag­ing ser­vice What­sApp, has been com­ing out with its own stand-alone mo­bile apps to cap­ture more of the time peo­ple spend on phones. Be­sides its Mes­sen­ger app, though, Face­book’s home-grown ef­forts have had limited suc­cess.

On Wed­nes­day, it in­tro­duced Hello, a voice-call­ing app de­signed for An­droid phones. In essence, it’s meant to re­place the voice di­aler on your phone. But based on Face­book’s in­abil­ity to per­suade users to in­stall its Home app, which lets Face­book take over the home screen on An­droid, users may not be too keen on re­plac­ing ex­ist­ing smart­phone tools with Face­book­branded ver­sions.

Face­book fi­nance chief David Wehner said mo­bile “con­tin­ues to be a key driver” of Face­book’s growth. He said Face­book will con­tinue to ex­per­i­ment with apps for mo­bile. For now, the mon­ey­mak­ing fo­cus is on Face­book it­self and, slowly, on popular, es­tab­lished apps such as Instagram.

Shares in Face­book Inc. fell US$1.76 to US$82.87 in ex­tended trad­ing af­ter the earn­ings re­port. At the close of regular-ses­sion trad­ing Wed­nes­day, the stock stood at US$84.63, an 8.5 per­cent in­crease since the start of the year.

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