MENLO PARK, Calif., April 24 (UPI) -- Social media giant Facebook reporter first-quarter profits and revenues that exceeded analysts' expectations, with mobile ads providing the surge in sales.
The company has been constantly repeating that mobile is where they see the money and it seems the executives at Facebook were right. Revenues in the first quarter rose 72 percent to $2.5 billion. Analysts' data shared with Bloomberg estimated revenues to be at $2.36 billion. Net income nearly tripled $642 million, or 25 cents a share, from $219 million, or 9 cents, a year earlier
According to comScore, nearly two of out three of Facebook's 1.28 million monthly users logs in daily, with more than half the users connecting only via mobile. This has translated into the company's advertising revenues, with mobile ad revenues accounting for 59 percent of its advertising revenue, up from almost nothing at the time of the company’s 2012 initial public offering
And this jump in mobile ad revenue has been made with a very conservative approach by Facebook. The company has been cautious not to turn away users because of advertising, but at the same time innovate new ways to make marketers happy. Facebook has redesigned its site to have bigger, bolder ads and also started auto-play video ads.
“Facebook’s business is strong and growing,” Chief Executive Officer Mark Zuckerberg said on a conference call Wednesday. “It has been a busy quarter and a strong one.”
Facebook is expected to get 22 percent of the $31.5 billion mobile ad market in 2014, up from the 18 percent it had in 2013. Google will continue to rule the roost with 47 percent in 2014, down two percent from 2013.
The company also announced the departure of its chief financial officer, David Ebersman, who will step down June 1. Ebersman was instrumental in helping the company emerge from its disastrous IPO and will be succeeded by David Wehner, Facebook’s vice president for corporate finance and business planning.
During a conference call, Zuckerberg spoke about Facebook's attempts to acquire other apps and how it could be a few years before the company would start making money from apps like Instagram. Zuckerberg said he preferred to concentrate on increasing the user base for these apps and providing users with the best services.
“We believe these apps have a lot of room to grow and will start to be important businesses in the future, but monetization isn’t our near-term priority,” he said.
Shares of Facebook rose about 3.5 percent in after-hours trading on Wednesday after falling about 2.7 percent at the close.