Facebook announced earnings on Wednesday and beat
expectations as the world’s largest social network continued to boost profits
on the back of mobile ads. Mobile ad revenue rose to 49% of revenue up from 41%
in Q2. Facebook’s adjusted profit doubled from this time last year to $621M
with $.25 EPS and revenue was up 60% to $2.02B. This jump can be attributed to
both high prices for mobile ads and more frequent ad clicks by users.
Twitter, whose IPO is set to take place in the coming weeks, has to be thrilled by the news of mobile advertising success on another social network. Facebook has endured user backlash over having ads injected into the social streams of users on behalf of all social networks. Since they have become commonplace on Facebook, social users will be fully desensitized to advertisements by the time other social networks like Twitter, Pinterest, and even SnapChat start including them in users social feeds.
Not everyone was excited though. Despite great numbers, investors were leery after earnings were released and the stock dropped on the announcement that Facebook will not increase the number of ads in user feeds and that teenagers were using the Web site less. Roughly 1 in 20 posts on Facebook user’s news feeds is an advertisement. Even with teenagers using the social network less, the website averaged 728M unique users per day which represents an increase of 25% from a year ago. Investor confidence has since returned as the stock finished up on Thursday.