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 Shares of Facebook surged 12 percent to $59.98 in after-hours
trading on Wednesday.
The world's largest social networking company said that revenue from
mobile ads represented 53 percent of its total advertising revenue
in the last three months of the year, or $1.24 billion, versus the
49 percent proportion that mobile ads represented in the third
quarter.
"They've cracked the code on mobile," said Arvind Bhatia, an analyst
at Sterne, Agee & Leach. "Within a little over a year's time mobile
has taken over desktop," in terms of ad revenue he said.
Facebook said it now has 1.23 billion monthly users, with 945
million accessing the service on a smartphone or tablet.
Facebook's newsfeed ads, which inject paid marketing messages
straight into a user's stream of news and content, have boosted
Facebook's revenue and its stock price in recent months. The ads are
ideally suited for the smaller-sized screens of smartphones and
other mobile devices.
The average price per ad on Facebook has surged 92 percent in the
past year, the company said, even as the total number of ad
impressions on Facebook declined 8 percent.
In a conference call with analysts on Wednesday, Facebook Chief
Executive Officer Mark Zuckerberg said the focus going forward was
to improve the quality and the relevance of the newsfeed ads, rather
than boosting the amount of ads in users' newsfeed.
Among the other priorities for the coming year, Zuckerberg said the
company would focus on creating new standalone products and on
improving Facebook's nascent search product.
DAILY USE RISING
Facebook had spooked some investors in October when it said that it
noticed a decrease in daily users among "younger teens." The remarks
raised fears that teen Facebook users might be drifting to new
messaging services such as Snapchat and WhatsApp.
Facebook Finance Chief David Ebersman said the company did not have
an update to share about teen usage during the quarter, though the
company noted that overall user "engagement" had increased
throughout 2013.
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Roughly 61.5 percent of Facebook's 1.23 billion monthly users
visited the site every day in the fourth quarter, an increase from
the 58.3 percent ration in the fourth quarter of 2012.
"The engagement on their site is going up and they're recapturing
people on Instagram, so they're not losing people," said Jefferies
analyst Brian Pitz, referring to the Facebook-owned mobile
photo-sharing service.
Overall revenue in the fourth quarter rose to $2.585 billion,
compared with $1.585 billion in the year-ago period and above the
$2.33 billion expected by analysts polled by Thomson Reuters
I/B/E/S.
Ebersman said that expenses in the coming year would likely increase
around 35 percent to 40 percent. He did not provide a revenue
forecast for 2014.
Facebook reported net income of $523 million, or 20 cents a share,
versus $64 million or 3 cents a share in the year-ago period.
Excluding certain items, Facebook said it earned 31 cents a share,
beating the 27 cents per share that analysts were expecting.
(Editing by Matthew Lewis and Lisa
Shumaker)
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