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Facebook’s mobile ad revenue doubles in fourth quarter

Social networking company, Facebook Inc doubled its mobile
advertising revenue in the fourth quarter reported Reuters. The network is witnessing
early success in expanding onto handheld devices as more of its users migrate
to smartphones and tablets.

Social networking company, Facebook Inc doubled its mobile
advertising revenue in the fourth quarter reported Reuters. The network is witnessing
early success in expanding onto handheld devices as more of its users migrate
to smartphones and tablets.

Investors want to see evidence
that CEO Mark Zuckerberg’s 8-year-old company is delivering on promises to
develop a full-fledged mobile advertising business, a challenge facing many of
today’s technology leaders including Google Inc. Shares of Facebook were down
roughly 3 percent at $30.21 in after-hours trading on Wednesday, regaining
ground after falling more than 8 percent immediately after the numbers were
released.

Mobile revenue estimates among
some analysts and investors were unreasonably high, said Sterne, Agee and Leach
analyst Arvind Bhatia.

“As a result the stock was
set up for disappointment,” he said. Overall, he said, Facebook’s results
were encouraging.

The company’s overall advertising
business grew at its fastest clip since before its May initial public offering,
helping the company’s revenue expand 40 percent and surpass Wall Street
targets.

Facebook introduced a wide
variety of new services in recent months as the company seeks to stay ahead in
the fast-moving Web market and to convince Wall Street that it can turn its
audience of more than 1 billion users into a sustainable business.

Zuckerberg said the company plans
to spend heavily to recruit talent in 2013 as the company pushes forward with
new product development, particularly “mobile-first” services.

“We aren’t operating to
maximize our profit this year but we’re doing what we think will build the best
service and business over the long term,” Zuckerberg said during a
conference call with analysts on Wednesday.

Facebook shares, which lost more
than half their value following a rocky IPO, have regained ground in recent
months as concerns about its mobile ad business and insider selling has eased.
Shares have surged roughly 60 percent since mid-November.

Zuckerberg said that recently
introduced products such as Gifts, which allows Facebook users to purchase
retail goods for their friends, as well as its new social search tool could
become important businesses in the future. But in the near term he said that
Facebook’s advertising efforts will be the core of its business.

Overall fourth-quarter revenue
came to $1.585 billion, up 40 percent versus $1.131 billion a year earlier.
Analysts were looking for revenue of $1.53 billion.

“Two quarters ago we really
had no mobile revenue,” Ebersman told Reuters in an interview. “In
the course of a pretty short period of time, we’ve dramatically ramped up our ability
to monetize mobile.”

Facebook said net income in the
fourth quarter was $64 million, or 3 cents a share, compared to $302 million,
or 14 cents a share a year earlier.

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