After a sluggish initial public offering, the social media conglomerate Facebook proved that they can make money on mobile platforms—through mobile advertising.
The fiscal third quarter brought Wall Street investors positive news regarding Facebook’s status after their slow start following their debut public offering. A notable increase in the number of mobile users and its corresponding revenue was reported, allowing financial investors and analysts a moment of relief regarding Facebook’s performance within the mobile market.
The reaction proved to be good news for the company, after suffering from a lackluster performance following their initial public offering of last May. Both financial investors and analysts have criticized the social media giant for lacking a concrete strategy for mobile platforms.
“Facebook had to prove that it could profit from mobile,” Technology Business Research analyst Ezra Gottheil commented about the news, adding that if Facebook can profit a little more, than they’ll be successful in profiting more in the future from their mobile direction, provided they find a way to succeed first.
The previous Tuesday revealed the third quarter financial reports from the social media giant, revealing that their mobile advertisement sales of around $150 million represented a total of 14% of Facebook’s total overall revenue of $1.26 billion. The overall revenue went up by at least 32%, exceeding the expectations of financial analysts.
It was also reported that the number of active monthly mobile users for Facebook reached 604 million unique registrations during the third quarter, up at least 61% from the previous count earlier this year.
Brad Shimmin, an analyst with Current Analysis, commented that Facebook hasn’t yet capitalized on a big opportunity within the mobile space; however they’re making significant progress. He also added that it’ll be a success if Facebook can gradually increase their revenue from its growing mobile user base over time.
News from the report also included Facebook’s closing of its purchase of Instagram, a favorite mobile photo-sharing app, in addition to the redesigning their current mobile application, delivering additional new development tools for both iOS and Android mobile platforms.
After the close of trading last Tuesday, Facebook’s stock remained at $19.50 a share, more or less half of their opening IPO price of $38. Following the earnings call, on Thursday, the share price reached an impressive $22.74.
The company’s loss of approximately $59 million, however, didn’t deter investors from the good news.