Facebook Q4 2012 results give cause for optimism and suggest the company is on the right track following its disappointing IPO and the lacklustre two quarters that immediately followed.
What stands out from Facebook’s Q4 results is the centrality of mobile for its service strategy and growth. Revenues from mobile advertising accounted for 23 percent of total advertising revenues compared to 14 percent in the previous quarter, with sponsored stories in the mobile news feed and app install ads proving effective. Wal-Mart alone delivered 50 million mobile ads to customers.
This solid progress on the mobile advertising front should be applauded as a key challenge for Facebook has been how to monetize its growing mobile user base, particularly as an increasing number interact with the platform by only via mobile devices. Facebook reported 680 mobile monthly active users in Q4, of which 157 million were exclusively mobile.
Facebook also noted that the recently launched Graph Search would be a pillar for future growth, although it would not be drawn on details. There will be growing pressure for Facebook to monetize Graph Search over the coming quarters and the most obvious way it could do so is via sponsored search. Although revenues from gifts and games only present a small part of Facebook’s revenues the story on this front was muted, as were insights into Instagram’s contribution to future growth.
Sign up for CIO Asia eNewsletters.