Facebook scores with mobile advertising
Facebook has posted a revenue of $2.5 billion in the first quarter of the year, with the boost in income provided by those annoying ads injected directly into Facebook’s newsfeed on mobile devices.
Facebook’s mobile advertising business accelerated in the first three months of the year, according to its latest results, making up 59% of its ad revenue – a leap from 30% last year.
Facebook’s overall revenue grew 72% year-on-year to $2.5 billion in the first quarter. The company said it earned $642 million in net income in the first quarter, versus $219 million.
Facebook’s newsfeed ads, which place paid marketing messages straight into a user’s stream of news and content, have ignited Facebook’s revenue growth and bolstered its stock price during the past year. The ads are ideally suited for the smaller-sized screens of smartphones and other mobile devices.
“They’ve got the right products for what advertisers are looking for and that’s manifesting itself in the results you’re seeing,” said JMP Securities analyst Ronald Josey.
Facebook said its total number of monthly active users reached 1.28 billion as of March 31, with 1.01 billion of those users accessing its service on mobile devices such as smartphones and tablets.
Facebook’s users spent more time on its service, with roughly 62.7% of its monthly users accessing the site every day, compared to 59.9% in the same period a year ago.
“We’ve made some long-term bets on the future while staying focused on executing and improving our core products and business,” said CEO Mark Zuckerberg. “We’re in great position to continue making progress towards our mission.”
New financial chief
Facebook also announced that CFO David Ebersman is resigning to pursue an unspecified opportunity in the healthcare industry, which is where he worked before joining Facebook in 2009. Ebersman, who will remain with the company through September, will be replaced by David Wehner, Facebook’s vice-president of corporate finance and business planning.
Ebersman saw the company through a rocky initial public offering in 2012, which was plagued by technical glitches with the Nasdaq stock exchange and concerns about what was then slowing revenue growth. Since the IPO, Facebook has regained Wall Street’s favour thanks to its strong mobile ad business.
Ebersman’s departure appears to have been part of a planned transition, said JMP’s Josey.
“This has been a tough decision because Facebook is such a great company and has such a bright future ahead, but I’ve decided to move back into healthcare where I spent my career before Facebook,” Ebersman said.