Facebook Is Making Enough Money Off Mobile Ads to Keep Wall Street Happy
While Google struggles with the transition to mobile, Facebook's making it look easy, reporting that it made 41 percent of its $1.81 billion in revenue this quarter from phone-based advertising.
While Google struggles with the transition to mobile, Facebook's making it look easy, reporting that it made 41 percent of its $1.81 billion in revenue this quarter from phone based advertising. That's up from 30 percent last quarter — enough to satisfy Wall Street this time, with stock trading up over 17 percent in after-hours trading. The gain last quarter showed the beginnings of this trend, but at the time investors felt Facebook spent too much money on developing products to justify the gain.
With a lot of the fear these days surrounding consumer shift from computers to smartphones killing ad revenue, CEO Mark Zuckerberg highlighted the achievement in the release. "We've made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile," he said . "The work we've done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future."
As the desktop audience has migrated to their phones — the app currently has 819 million monthly active users, up from 751 last quarter — Facebook has managed revenue gains in recent quarters, as this chart via our colleagues at Quartz shows:
In addition to the half a dozen mobile ad products Facebook has developed over the year, just last May, for example, the social network started putting big wide ads right in the app, just like the desktop version. At the time, we wondered if the ads would deter people from heading to the app. But it turns out, not.