Facebook profits triple as mobile accounts for 59% of ad revenue

25/04/2014

A rise in mobile ad sales helped Facebook triple its profits in the first three months of 2014, with a staggering 59% of ad revenue coming from mobile.

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The company posted a Q1 profit of $642m (£380m) on the back of a 72% surge in revenues, driven by mobile advertising.

The amount of money it makes from advertising is up 82% on the same period last year, with mobile ads accounting for about 60% of all sales.

Part of that revenue came from mobile application install ads, which have generated 350 million installs since the option was introduced two years ago.

Facebook chief executive Mark Zuckerberg said: "Facebook's business is strong and growing and this quarter was a great start to 2014."

Facebook also confirmed that it's launching a developer ad network and more stand-alone apps.

In an apparent nod to the company's $19bn (£11.4bn) acquisition of WhatsApp, he added: "We've made some long term bets on the future while staying focused on executing and improving our core products and business. We're in a great position to continue making progress."

Facebook also announced chief finance officer David Ebersman will be stepping down after five years at the company.

Ebersman, who will remain with the company until September, said he plans to return to the healthcare industry.

He will be replaced by David Wehner, Facebook's vice president for corporate finance and business planning, and the former chief financial officer at games company Zynga.

"Facebook's business is strong and growing, and this quarter was a great start to 2014," said founder and chief executive Mark Zuckerberg in a statement.

"We've made some long term bets on the future while staying focused on executing and improving our core products and business. We're in great position to continue making progress towards our mission."

Shares of Facebook rose as much as 4.3% in after-hours trading.

Facebook ‘reaches 1.28 billion people’

The firm said it reached 1.28 billion users during the period, with more than a billion of those accessing the site through a mobile device, such as a smartphone or tablet.

The company has taken steps to further grow its mobile business - which barely used to generate any advertising revenue a few years ago - by expanding its product offerings.
This includes launching the Facebook Messenger service and news application Paper.
Facebook also bought photo-sharing application Instagram in 2012 and recently agreed to buy mobile text messaging service WhatsApp for $19bn.

Bright mobile future for Facebook?

According to some forecasts, Facebook is expected to capture an even bigger slice of the mobile and digital advertising market this year, trailing only Google which accounts for the bulk of market share.

Commenting in the deal, Rupert Staines, MD Europe, RadiumOne, said: "These are exciting times for digital businesses and Facebook is no exception. They rightly recognise users' consumption habits are shifting increasingly to mobile. They need to show they can monetise this but user's privacy concerns remain high.

“Advertisers want results but they also want transparency and control over how their money is spent. Users will accept advertising that is relevant and good, at the right time on whatever device they are using. Facebook is a part of this but only a relative part of a users increasingly fragmented media consumption so it’s important to understand the bigger online picture."

http://investor.fb.com/releasedetail.cfm?ReleaseID=842071">Read the official Facebook statement here

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