FB Beat The Streets ! Facebook Now Makes Most Of Its Money — 53% — From Mobile Ads
One of the most stunning statements Facebook just made is that 53% of its revenue now comes from mobile — not desktop — ads.
When it went public during the spring of 2012, Facebook wasn’t making any revenue from mobile ads. Mobile revenue is also up 23% from this quarter last year.
how Facebook went from zero to 53% in less than two years.(See Story Below)
Here are some more mobile stats from Facebook’s earnings report:
- Mobile daily active users were 556 million on average for December 2013, an increase of 49% year-over-year.
- Mobile monthly active users were 945 million as of December 31, 2013, an increase of 39% year-over-year.
In 2010, Mark Zuckerberg was not a fan of advertising.
“There’s no point right now in having a massive profit,” he said then. “[Ads] factor in, like, not at all.” Instead, he was focused on attracting 1 billion active users.
Now Facebook and its mobile advertising business are surging. During its last earnings call, Facebook reported that 49% of its revenue comes from mobile advertising, up from 14% on year prior. Its stock has risen above its IPO price and is trading at $54 per share When mobile apps started taking off, Facebook fell behind. Its app was faulty and none of the traffic was being monetized. Facebook’s desktop ads translated poorly to mobile. Zuckerberg and his board realized they needed to shift gears quickly. Zuckerberg turned to his former teaching assistant at Harvard, Andrew Bosworth, who is now an engineer at Facebook. Zuckerberg asked him to help build a billion-dollar business in six months. Bosworth spent the next 1.5 months working on an 80-page spreadsheet and interviewed fellow employees. Zuckerberg dubbed the project, “Prioritization.” The goal was to figure out mobile monetization, as well as all the other untapped ways Facebook could generate revenue.Part of Facebook’s mobile problem was Zuckerberg himself. He believed firmly in upholding a great user experience, so he didn’t like non-social ads or ads that cluttered the News Feed, where Facebook users spent the bulk of their time. Zuckerberg had a change of heart after seeing some alarming data. “Chris Cox, Facebook’s vice president of product, showed the CEO internal data that suggested his previous resistance to nonsocial ads was hurting Facebook’s business,” Rusli reports. Employees remember the meeting where Zuckerberg first suggested running integrated ads in the News Feed. They were shocked. But Zuckerberg insists to Rusli: “It’s not like I just decided to get more involved in ads. I needed to because basically the ad product had to be more integrated.” The new advertising efforts paid off. Facebook is expected to generate $3 billion — or one-third of its revenue — from mobile advertising this year. Zuckerberg now spends a lot of time with Facebook’s top advertisers, learning how to create a great experience on Facebook for them as well as for users. “It’s a story of a vertical learning curve,” investor and Facebook advisor Marc Andreessen tells Rusli.
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