Mobile ads boost profits at Facebook

Facebook reported sales and profits that exceeded analysts’ estimates as the operator of the social-networking service attracted more marketers to its mobile advertising services.

Second-quarter revenue rose 53% to $1.81bn (€1.37bn), the company said yesterday. Second-quarter profit excluding certain items was $488m, or 19c a share.

Mobile made up 41% of advertising dollars in the second quarter, up from 30% in the first quarter.

Chief executive Mark Zuckerberg’s push to make advertising for smartphones and tablets a priority is starting to pay off, as users increasingly access Facebook on mobile devices, according to Martin Pyykkonen, an analyst at Wedge Partners in Greenwood Village, Colorado.

“They’re getting better on their execution in the business of selling advertising,” Mr Pyykkonen said. “There’s a long way to go, but things are going in the right direction.”

Facebook is projected to take 13% of the global mobile-advertising market this year, up from 5.4% last year according to EMarketer. Still, the company remains a distant second to Google, which is expected to grab 56% of the market this year.

Shares of Facebook climbed as much as 17% in extended trading. The stock advanced 1.5% to $26.51 at the close in New York, leaving it down 30% since an initial public offering last year.

Net income attributable to shareholders was $333m from a loss a year earlier.

Facebook has stepped up efforts with its mobile services, including updates to its smartphone applications and a new video feature for photo-sharing service Instagram.

Investors’ concern that Facebook’s wasn’t shifting its focus fast enough toward wireless devices weighed on the shares in the four months following its market debut.

The number of mobile users expanded 51% to 819 million during the quarter. The total number of Facebook members was 1.15 billion, compared with 1.11 billion in the earlier period.

Facebook is also making improvements to its advertising tools for marketers. The company said last month it intends to cut its 27 ad units by more than half, making the promotion-buying process more simple and efficient.

- Bloomberg


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