Record for Facebook shares as mobile revenues soar

Facebook shares rose to a record as the social network caps a year in which mobile advertising increased and marketing initiatives expanded with applications and video.

This year Facebook made further headways in mobile, a business that has flourished from a minor portion of ad revenue at the time of the IPO to a majority.

Acquisitions have also been paying off: A Citigroup analyst last week said Instagram, the photo-sharing app Facebook bought for $1bn (€816m) in 2012, is worth $35bn.

“While the shares have likely benefited from the recent market rally, we see growing confidence in the monetisation prospects of Instagram as an impetus to the recent uptick,” James Cakmak, an analyst at Monness Crespi Hardt, said.

Sales are projected to surge 46% to $3.77bn in the fourth quarter. Mobile promotions accounted for 66% of ad sales last quarter.

Marketers have also been paying more for fewer ads. Higher-quality ads, improved targeting and premium video advertising, led Facebook to more than triple prices for promotions in the last quarter compared with a year earlier.

Facebook is projected to take 8% of the $140.7bn global ad market this year, up from 5.8% last year, according to EMarketer.

* Bloomberg