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Facebook Earnings: Mobile Momentum And Massive Mojo

Jan 29 2014, 10:47pm CST | by , in News | Technology News

Facebook Earnings: Mobile Momentum And Massive Mojo
 
 

It’s a 22 minute drive from Sunnyvale to Menlo Park, but Yahoo and Facebook might as well exist on different planets.

A day after Yahoo CEO Marissa Mayer tried to explain to investors exactly how selling more ads for less money constitutes “a strong foundation for growth,” her counterpart, Mark Zuckerberg, required no such contortions.

Everywhere that Yahoo is weak, Facebook is strong. Mobile, once seen as Facebook’s Achilles heel, is now the foundation of its strength, representing 53% of total ad revenue in Q4. In fact, the $1.25 billion in mobile revenue Facebook vacuumed up in the fourth quarter was almost as much as the company’s total revenue in the year-earlier quarter, as COO Sheryl Sandberg pointed out.

Thanks to a months-long push to weed out low-quality ads, combined with the decision to cap the frequency of ads delivered in Newsfeed, Facebook is able to keep raising the rates it charges marketers. Meanwhile, the monetization of Instagram — an environment considered by many to be a more natural home for brand advertising than Facebook itself — is only just getting under way.

The situation is so enviable that Zuckerberg has leisure to contemplate the ultimate problem of affluence: the possibility that Facebook will run out of potential new customers in the foreseeable future, having already signed up basically everyone with an internet connection.

Heading off that scenario by bringing internet access to the billions of people who currently lack it is the focus of Facebook’s 10-year plan, Zuckerberg said. He also identified the priorities of his three-year plan (encouraging more sharing around so-called public content) and five-year plan (“helping people answer their questions” on Facebook through Graph Search).

Just about the only thing Zuckerberg doesn’t seem to have a ready answer for is the worrisome indicators that younger teens may be drifting away from Facebook to other services. Asked whether there’s been any change in the trend, Zuckerberg deferred to his CFO, David Ebersman, who merely said, “We don’t have any new data to report today.”

But given Facebook’s history of underpromising and overdelivering, don’t be surprised if they solve that one soon, too.

Source: Forbes

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