Facebook strengthens its grip on mobile, latest earnings show

Total sales of more than US$2 billion are up 60 percent from a year ago

Facebook's mobile app.

Facebook's mobile app.

Facebook made new gains in its efforts to monetize its mobile business in the third quarter, reporting Wednesday that those devices drove nearly 50 percent of its advertising sales.

Total revenue for the quarter ended Sept. 30 was US$2.02 billion, the company reported in its earnings announcement, up 60 percent compared to $1.26 billion during the same period last year. The company's sales topped expectations of $1.91 billion, based on projections of analysts as polled by Thomson Reuters.

Revenue from advertising was $1.8 billion, up 66 percent from 2012's third quarter, Facebook reported. Ads on mobile devices constituted roughly 49 percent of those sales, the company said.

Profits were strong, too. Net income for the quarter was $425 million on earnings per share of $0.17, compared to a net loss of $59 million and a loss per share of $0.02 during the year-ago period.

Excluding share-based compensation expenses and related payroll tax expenses and adjustments, earnings per share were $0.25, up 108 percent from last year.

Mobile is a critical area of Facebook's business as more Internet users migrate away from the desktop in favor of devices like smartphones and tablets. Driving advertising on mobile can be challenging for Internet companies, but Facebook has been making inroads. The mobile gains reported Wednesday show a continuation of steady mobile advertising growth since late last year.

Facebook's mobile advertising sales have risen from 23 percent of total revenue in 2012's fourth quarter, to 30 percent in 2013's first quarter, and finally to 41 percent last quarter.

"The strong results we achieved this quarter show that we're prepared for the next phase of our company, as we work to bring the next 5 billion people online and into the knowledge economy," Facebook CEO Mark Zuckerberg said in a statement, referring to the company's Internet.org campaign.

The company stands to grow its mobile advertising sales further, given the launch of products like ads on Instagram, the popular photo sharing app owned by Facebook.

Earlier this year Facebook said that building mobile products would be a focus for 2013.

Facebook also grew its monthly active users during the quarter to 1.19 billion, an increase of 18 percent compared to last year. On a monthly basis, many of the company's users -- 874 million -- are also active on mobile, according to Facebook.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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Zach Miners

IDG News Service
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