Facebook mobile ad revenue jumps even as quarterly profits sink
Facebook has revealed that it posted a revenue of $1.59 billion in the fourth quarter of FY 2012-13, a 40% jump from last year’s quarterly numbers. It was further revealed that 23% of the total revenue was generated by mobile ads, an increase from the last quarter when mobile ads contributed to 14% of Facebook’s bottomline. However, in spite of the revenue increase, the social networking giant saw a drop in its quarterly profits by 79%, leading to a final figure of $64 million.
While speaking with the Los Angeles Times, financial analyst Michael Pachter explained that the fall in profits was as a result of increased spending by Facebook. In spite of financial analysts and investors looking at the profit margin with concern, Facebook has no intent of singularly focussing on profits. During the conference call where these results were announced, Mark Zuckerberg, CEO of Facebook, reiterated the fact that the company would continue investing in mobile and search rather than on maximizing profits.
In response to the results, the market closed with Facebook shares 3.8% below their opening value (for the day). Facebook also revealed that over 680 million visitors were accessing the site using smartphones every month and that the site now hosted 1.06 billion accounts.
Sources: The Los Angeles Times, The Wall Street Journal