Facebook sales surge as it goes mobile

The social network is about to turn 10 and fourth quarter sales are up 63%. Many happy returns...

by Rachel Savage
Last Updated: 09 Apr 2015

It’s been a bumper year for Facebook, with sales rocketing after the social network finally worked out how to advertise to its hundreds of millions of mobile users.

Revenues rose 63% year-on-year to $2.59bn (£1.57bn) in the three months to the end of 2013, while quarterly profits boomed eight-fold to $523m. Sales for the full year were up 55% to $7.87bn.

Facebook, which will turn 10 years old next Tuesday, is definitely milking the mobile cash cow now. Mobile ads raked in 53% of the $2.34bn quarterly advertising revenue, up from 23% a year earlier and 49% the previous quarter. Two years ago, it made zero dollars from our phones.

‘Mobile continues to drive our growth,’ said finance chief David Ebersman. ‘When we began 2013, we had more daily users on desktop than on mobile. By the end of the year, the number of users on mobile outnumbered desktop by around 200m.’

Facebook’s ‘daily active users’ averaged 757 million in December, up 22% from the previous year. Sounds like rumours of its imminent death have been greatly exaggerated.

The California-based company is riding high after its disastrous IPO in May 2012 saw its value plummet from the $38 listing (which it only recovered in July last year). Shares climbed as much as 12% to $60 in after-hours trading in New York. Good news for thick-skinned investors who stuck with Facebook after the bungled float.

‘It was a great end to the year for Facebook,’ boss Mark Zuckerberg said in a statement. ‘We're looking forward to our next decade and to helping connect the rest of the world.’

It’s not surprising that Zuckerberg is looking beyond Cali’s beaches to the wider world, including launching a campaign to bring internet to the five billion people without it (think of all the selfies). Western teens are increasingly snubbing Facebook for parent-free alternatives like WhatsApp and Snapchat, which Facebook tried and failed to buy last year for $3bn. Hell, even Obama knows it’s just not that cool anymore.

However, while the rest of us remain glued to our phones, ringing in the change, Zuckerberg probably won’t be too concerned. The same can’t be said for Yahoo, which reported yesterday that fourth quarter sales fell 6%. To add insult to injury, Facebook overtook the ageing internet giant to become the number two seller of digital advertising in the US in 2013, with a 16% market share, according to research firm eMarketer.

Ahead of everyone else is still Google, with a 32% share of the global digital ad market in 2013. While the search leviathan is splashing out on everything from intelligent home gadgets to artificial intelligence, Facebook said it is still moving slowly on adding advertising to Instagram, which it bought for $1bn back in 2012. With all that cash to play with, the social network may start looking for some more lucrative purchases…

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