Arab Today, arab today mobile lifts facebook profit stock price surges
Last Updated : GMT 21:25:08
Arab Today, arab today
Arab Today, arab today

Mobile lifts Facebook profit, stock price surges

Arab Today, arab today

Arab Today, arab today Mobile lifts Facebook profit, stock price surges

San Francisco - AFP

Facebook surprised Wall Street by showing it can make money from folks on smartphones and tablets, causing the leading social network\'s stock to rocket. \"The work we\'ve done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future,\" said Facebook chief Mark Zuckerberg as the social network reported a quarterly profit of $331 million. Revenue for the quarter that ended June 30 climbed to $1.81 billion, up 53 percent from the same period a year earlier. The profit of $331 million compared with a loss of $157 million the California-based company posted in the same quarter last year. Facebook said 41 percent of its ad revenues came from mobile, compared with 30 percent in the prior quarter and virtually nothing a year ago. \"We\'ve made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile,\" Zuckerberg said. Facebook shares leapt more than 19 percent but gave back a bit of the gain, settling closer to $31.03 in late after-hours trading. Facebook is expected to increase its share of the $116.82 billion global digital ad market to 5.04 percent this year, according to industry tracker eMarketer. The leading social network\'s portion of the mobile ad market will more than triple to more than $2 billion this year, eMarketer forecast. Forrester analyst Nate Elliott expressed fear that Facebook may be \"pulling the mobile ad lever too hard\" and be hitting users with too many marketing messages in an effort to prove itself. Facebook has made a priority of following its more than one billion members onto smartphones or tablets as lifestyles increasingly revolve around accessing the Internet from mobile devices. Facebook\'s stock took a beating after the company\'s initial public offering, largely because of criticism that the social network wasn\'t making money from mobile users. The shares sank from an offering price of $38 and have still not recovered. \"We are worried that Facebook seems to have taken the affront of not being able to monetize on mobile a little too much to heart,\" Elliott said. \"If they feel the need to keep proving their mobile chops, this is going to get ugly for the user,\" the analyst continued. \"I think they have already pumped in too many ads.\" Ads make up about five percent of the posts streamed to news feeds on people\'s profile pages, according to Facebook. There has been no \"meaningful drop\" in user satisfaction, but \"people have told us they notice the ads more,\" Zuckerberg said during an earnings call with analysts. \"Our goal is to increase the quality instead of just increasing the number of ads shown,\" Zuckerberg said. Facebook\'s stellar growth rate is, understandably, continuing to flatten out, Elliott noted. The social network reported that it had 1.15 billion active monthly users as of the end of June in a 21 percent increase from a year earlier. The number people accessing the social network from mobile devices each month jumped 51 percent to 819 million during the same time period. \"It is up to emerging markets to accelerate growth in active users, and China is the obvious choice,\" Elliott said. \"There are 400 million people waiting for a crack at this platform if Facebook could just sit down with the Chinese government and work things out.\" Facebook chief operating officer Sheryl Sandberg was optimistic about the social network\'s potential to grow across Asia and elsewhere. \"Our mission is to reach everyone, not just people in developed countries,\" Zuckerberg said. Facebook on Monday boasted that it has surpassed 100 million users a month using an application designed for \"simple\" mobile phones widely used in developing nations. Zuckerberg rejected the notion that fewer teenagers were hanging out at the social network. \"Based on data we have, we fully penetrated the teen market in the US for a while and it has remained steady,\" Zuckerberg said. \"And, Instagram is growing quickly as well.\" Facebook recently added smartphone video-sharing to its Instagram photo-based social network, in a move challenging Twitter\'s popular Vine service. \"We are building Instagram to be a business and we expect over time to make a lot of profit from it,\" Zuckerberg said. \"The right focus for now is to increase the footprint and, when the right time comes, we will do advertising as well.\" Facebook acquired Instagram last year. The original price was pegged at $1 billion but the final value was less because of a decline in the social network\'s share price.

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