x Abu Dhabi, UAESaturday 22 July 2017

Facebook reaping benefits of pushing into mobile advertising

Facebook chief executive Mark Zuckerberg is reaping benefits of a deeper push into mobile advertising at the social network he founded almost a decade ago.

Facebook chief executive Mark Zuckerberg is reaping benefits of a deeper push into mobile advertising at the social network he founded almost a decade ago.

Results due after the close of trading will probably show that revenue rose 34 per cent to US$1.52 billion last quarter, according to analyst estimates compiled by Bloomberg. That would be the first growth acceleration since Facebook sold shares to the public in May. Revenue climbed 32 per cent in the preceding two periods, a slowdown from earlier quarters.

Shares of Facebook have climbed 74 per cent since slumping to a record in September, bolstered by signs of buoyant demand for marketing messages shown to users of social networks on tablets and smartphones. Mobile advertising made up 24 per cent of the total in the fourth quarter, up from 14 per cent in the prior period, according to Topeka Capital Markets. That suggests new tools aimed at making ads more useful on small screens are having the desired effect with corporate customers.

"Mobile is definitely important to them, mainly because usage is shifting over to mobile," said Victor Anthony, an analyst at Topeka Capital Markets who rates the stock a buy. "They'll have to continue to show they're making strides in monetizing mobile."

Revenue from mobile doubled last quarter to $304 million, Anthony predicted. Analysts at JPMorgan Chase & Co estimate that mobile contributed $384.2m, or 27 per cent of the total.

Facebook's fourth-quarter profit excluding certain items probably rose to 15 cents a share, the average estimate compiled by Bloomberg. Net income slumped to $45.8m, according to analysts' projections.

The stock fell for most of the succeeding five months, wiping out more than $40bn in market capitalisation, amid concerns that Facebook and its advisers had set the IPO price too high for a company that had not yet come to grips with a shift to mobile computing.

 

* Bloomberg News