Facebook revenue soars thanks to mobile users

Facebook has found a way to generate revenue from mobile phone users following the company’s huge profits for the last financial period. Facebook reported an increase in its revenues, earning over $2.02bn in the third quarter with mobile ads accounting for nearly 50% of the total revenues.

The company’s shares registered a 15% increase within the same period, something which eliminated any worries that investors had about the company’s shares whose prices seemed to have stagnated for a while.

The site has over 728m active users daily, which is a 25% increase from prior period and an estimated 1.19bn users monthly, which is 18% increase.

There has been a decline in the number of teen users on Facebook, something which has made the company’s stock to decline in overall value. Facebook however said it will not be increasing the ads it has been using in news feeds.

According to the finance director at Facebook, Mr. David Ebersman, there was a drop in the number of daily teen users in the social networking site down from a rather stable level during the second and third quarter.

Ebersman’s claims followed Mark Zuckerberg’s announcement that the company is delivering on its aim of connecting the world. According to Zuckerberg, the positive performance is an indication that the company is ready for its next growth phase of bringing five billion people online.

The number of monthly users on Facebook now stands at 874 million, which has been a 45% increase since last year. The company’s revenues stood at $2.02 billion, which is a 60% increase for the similar period in 2012, which stood at $1.26 billion. This actually exceeded the estimates by about $110 million.

The advertising revenue stood at $1.8billion, which exceeded last year’s performance by 66%. Out of the total revenue, 49% is from mobile ads. There has, however, been delays by Facebook to introduce its video advertising revenue segment through Instagram, which was bought for $1bn. Facebook investors are optimistic that this new segment will transform the company’s advertising revenue potential.