Facebook’s revenue was up as it slowly makes the transition to a mobile company. For its first quarter ending March 31, its mobile business rose to 30% of total advertising sales to $375 million, from 23% a year ago. Monthly active mobile users increased to 751 million, up 54%. It was about a year ago that Facebook was discounted as being nowhere in mobile. Since then the company has aggressively fought to change that perception.
The boost in mobile helped its overall results and the Menlo Park firm beat Wall Street’s expectations as revenue rose 39% to $1.45 billion with adjusted net income of $312 million. This is up from $287 million in the same quarter a year ago.
Ad revenue was up 43% and represents 85% of total sales. Mobile ad sales were clearly helped by Sponsored Stories, which Facebook pushed to market and aggressively promoted. The growth in consumer mobile device usage over the past three years has pushed Facebook to change its strategy and go more aggressively at mobile, or risk being labeled an also ran. It now can extend desktop ads to personal mobile news feeds that generally produce higher levels of user engagement than what is seen on the desktop.
App Install Ads Pay Off
Facebook’s latest mobile strategy also included allowing developers the ability to promote their apps from within the platform on installs, via app install ads, linked directly to the installation process. Facebook reported that these ads drove almost 25 million downloads and that 40% of the top 100 apps on both iOS and Android platforms are now using app install ads. This revenue stream could continue to be lucrative going forward if downloads continue to grow at a steady rate.
Facebook Home Remains Key
But the real key will be the market acceptance of Facebook Home, the new home page the company launched for smartphones, and the bundling agreements with HTC and other device providers. It remains to be seen if people will use the Facebook-centric interface, bypass it on the device, or upgrade to non-Facebook Home devices when they upgrade their existing device. New devices with Facebook Home will begin shipping soon. Facebook Home is also available as an app as well although so far only about 500,000 downloads have been registered on Google Play since early April.
Facebook is also exploring the expansion of video advertising on its platform, and as next generation mobile devices gain higher performance features, video on mobile, especially for ads purposes, will be a key opportunity for Facebook as it enhances its mobile strategy over the next year.
– Randy Giusto