Facebook’s mobile surprise allays growth fears – Yahoo! News
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SAN FRANCISCO (Reuters) – Facebook Inc grew mobile advertising revenue several times in the third quarter, a faster-than-expected pace that helped drive shares in the world’s No. 1 social network nearly 13 percent higher.
Facebook said on Tuesday that it now gets 14 percent of its advertising revenue from mobile ads, helping to reassure investors that the social network is beginning to figure out how to earn money off smartphone and tablet users.
Mobile ad revenues totaled roughly $150 million, up from an estimated $40 million to $50 million in the second quarter and almost nothing in the first.
“This certainly dispels the most bearish view, that Facebook couldn’t monetize people on phones or tablets,” said Colin Sebastian, an analyst with Robert Baird & Co.
“In about a six-month period they’ve actually started to generate decent revenues form their mobile applications,” Sebastian added, though he said Facebook still needs to show that its mobile ads can command the same rates as its traditional ads and that they can deliver results for marketers.
Mobile advertising has been among the key investor concerns hanging over Facebook, helping slash more than $40 billion off its market value since its May IPO. As its users increasingly access the social network with their smartphones, Facebook has struggled to transition its business to mobile devices.
The mobile ads helped reignite Facebook’s overall advertising business during the third quarter, following several consecutive quarters of slowing revenue growth that raised questions about Facebook’s long-term prospects.
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Posted on October 25, 2012, in Article and tagged Advertising, Facebook, Initial public offering, Mobile advertising, Mobile application development, Reuters, Revenue, Social network. Bookmark the permalink. Leave a comment.