Apr 26, 2015

Facebook earns major part of its revenue from Mobile ads

Facebook continued growing its business with ads placed on small screens last quarter, when it generated 73 percent of its sales from mobile ads.

The company reported on Wednesday that Facebook's total first-quarter revenue was US$3.54 billion, up more than 40 percent from a year earlier. That was a bit less than the consensus analyst estimate of $3.56 billion, as polled by Thomson Reuters.

Many people log on to Facebook from smart phones or even mobile phones. Facebook's mobile ad business has become a powerhouse now.

During the quarter, which ended March 31, Facebook grew its mobile ad sales by 59 percent to $2.59 billion. After going public in mid-2012, Facebook faced questions from investors over its ability to grow its business on mobile, but the company eventually dismiss those doubts.

Net income came in at $512 million, down 20 percent, while earnings per share dropped 28 percent to $0.18.

On a pro forma basis, which excludes certain costs, such as share-based compensation and related payroll tax expenses, Facebook had earnings per share of $0.42, up from $0.35 last year, and beating the analyst consensus estimate of $0.40.

"This was a strong start to the year," CEO Mark Zuckerberg said in a statement.

The company's costs and expenses rose by more than 80 percent from a year earlier, to $2.61 billion.

The number of people who log in monthly to Facebook grew by 13 percent, to 1.44 billion. And the number of those people who log in from a mobile device grew faster, by 24 percent to 1.25 billion.

In addition to its primary mobile app, Facebook now operates a suite of apps including Instagram, Messenger and WhatsApp. But its flagship app generates by far the most mobile ad sales.

This could get Facebook more revenue if they start posting ads on Instagram and Whatsapp, but both or these apps has no ads.


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