What a difference a year makes. This time last year, Facebook shares slid by 11 percent when its first trading update as a publicly listed company turned out decidedly lacklustre.
Today, it’s all changed: shares in the social network are up by 18% after it reported a $US333 million ($A360) profit for Q2, pushed up by mobile ad revenues, which reached $US655.6 million.
That figure is more than 40 percent of the overall $US1.6 billion it made from advertising, compared with 30 percent for the same period last year. And with mobile users rising 51 percent to 819 million, we’d say Facebook’s mobile advertising revolution is well and truly under way.
The company still has some way to go before it makes any real inroads into the market, mind: research by eMarketer suggests it will need to make more than $US2 billion from mobile advertising to increase its share of the digital ad market to 5.04 percent, from 4.11 percent in 2012.
And although share prices have risen, they are still 16.7 percent down from the $US38 investors paid for the IPO last year.
Still, chief executive Mark Zuckerberg seemed optimistic.
‘This quarter marks the end of our first year as a public company and I think we’ve created a good foundation for the future,’ he said.
Facebook's erstwhile rival Google, reported an uncharacteristicly weak Q2 by contrast, largely due to pain in transitioning to mobile ads.
Its Q2 revenues where up 19 per cent to $US14.11 billion. This time last year they were $US11.8 billion. Net revenue was $US11.1 billion, compared to $US9.2 billion a year ago, and it delivered net income of $US3.23 billion or $US9.54 a share ($US8.42 a share last year) — which translates into $US9.56 a share once stock options are excluded.
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