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Facebook: Always about mobile

May 2nd, 2013 at 9:30 AM
Facebook Earnings Analysis Q1 2013

Facebook is now firmly entrenched as a mobile company, with 30% of total advertising revenue coming from mobile. Mobile is the key front for Facebook now and for the foreseeable future, as users continue to spend the majority of their time on phones and tablets. Mobile monthly active users (MAU) grew to 751 million in the first quarter, with total daily active users (DAUs) reaching 1.1 billion. UBS analyst Eric Sheridan noted that mobile advertising revenue was above his estimates at $374 million, and he expects to see continued growth as more users, and more ads go online.

“For Q2 2013, we are expecting mobile ad revenues of $448mm (32.5% of advertising revenues), representing 20% growth QoQ, and $931mm of desktop advertising revenues, representing a 1.6% decline YoY,” Sheridan wrote in his note.

Facebook is spending extremely aggressively, as it continues to invest in the future of its company. Overall spending during the quarter rose 60% to $1.08 billion, and if products such as Graph Search, Facebook Home and others play out as the company expects, the spending will prove to be worth it over the long haul.

Facebook talked up how important it is to developers on the earnings call, and mobile is at the forefront of this as well. CEO Mark Zuckerberg noted that Open Graph came to mobile this month, and the results are already being seen. “And our efforts are paying off with now 81 of the top 100 growth in iOS apps and 70 of the top 100 Android apps integrating with Facebook and continuing to grow,” Zuckerberg said on the call.

Facebook, with its 1.1 billion users, is leading the mobile advertising revolution, as advertisers continue to see the benefits of smartphones and tablets. The social networking giant has done an excellent job of increasing engagement, and future products are geared towards increasing that, trying to stem any fears of the platform losing traction.

So far, it looks like Zuckerberg and team have gotten this one right.

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