Facebook upbeat on mobile

25 October 2012

NEW YORK: Facebook, the social network, believes the "compounding together" of various trends will drive up revenues on mobile, a channel that may in time become more profitable than the desktop web.

By the close of the third quarter, some 604m people logged on to its site using wireless devices each month, a 61% annual increase. The platform's total user base stands at 1bn consumers.

Mark Zuckerberg, Facebook's CEO, said on a call with analysts: "On mobile, we have these three forces compounding together. We can reach more users, those users visit Facebook more often, and I think we will make more money. So I'm excited about this opportunity."

The firm launched its first mobile ad product, letting brands insert messages into users' newsfeeds, just six months ago, but the medium still yielded $150m in the last quarter. By the end of Q3, it was deriving $3m per day from this area, up from $1m in Q2.

Elsewhere, Facebook reported that members solely signing in via a desktop had a 40% likelihood of visiting its site on a daily basis, rising to 70% where they did so from a mobile phone.

Having received feedback that its apps were not fast enough, the company has also relaunched them, prompting an 80% increase in newfeed activity on Apple devices, and 20% in "likes" and comments.

"I want to dispel this myth that Facebook can't make money on mobile. This may have seemed true earlier this year because we hadn't started trying yet," Zuckerberg said.

"I believe that over the long run we're going to see more monetisation per time spent on mobile than on desktop. Now, this isn't proven yet, but we're committed to getting there."

In further evidence of the progress it is making, Zuckerberg pointed to Facebook Offers, where firms can send discounts to users, with roughly 30% of redemptions now occurring on wireless handsets.

Similarly, Instagram, the photo-sharing mobile app, has seen its audience swell from 27m users in April, when Facebook acquired the organisation for $1bn, to 100m people.

Zuckerberg added that eight of the top ten apps for Apple devices are integrated with Facebook. To date, 40% of the 400 leading apps have utilised its software development kits.

"The next five to ten years are going to be about all the apps and experiences that are now possible to build now that all these connections have already been mapped out," he said. "The social graph is a new sort of critical infrastructure for companies."

Faceboook generated $1.3bn in revenues during the last quarter, but still made a loss of $59m. Overall ad sales stood at $1.1bn.

Data sourced from Seeking Alpha; additional content by Warc staff