Facebook's Q2 shows major move toward mobile

Facebook and its millions of users love mobile devices. The social media giant’s second quarter results showed a huge increase in mobile users — and mobile revenue.
The company had a good quarter, beating market expectations with $2.91 billion in revenue, an increase of 61% over the the same quarter of 2013. An average of 829 million people used Facebook daily in June, an increase of 19% year-over-year. Impressive, but mobile Facebook users increased 39%, rising to an average of 654 million daily.
That shift showed up in dollars: mobile ad revenue in the second quarter was $1.66 billion, representing about 62% of Facebook’s total $2.68 billion in ad revenue. In the same quarter of 2013, mobile ads made up only 41% of the company’s total.
“Mobile continues to be a strong driver of our growth with over one billion people using Facebook monthly on mobile,” said COO Sheryl Sandberg in a conference call with investors. “At the same time we’re enabling more ways for people to connect and share beyond the core Facebook app.”
Sandberg noted that the Facebook-owned Instagram and Messenger have each passed over 200 million monthly average users. Facebook also bought the popular messaging application, WhatsApp for $19 billion in February, but the impact of that move has not been fully felt since the deal has not closed yet.
Facebook’s ability to not only adapt to the mobile platform but also monetize it impressed many observers — especially considering that when Facebook was first founded in 2004, the smartphone was only one year old.
“What Facebook has done with mobile is one of the most impressive things I’ve seen an Internet company do in recent years,” Mark Mahaney, an analyst for RBC Capital Markets, told the Wall Street Journal. Facebook is not alone in taking advantage of mobile ads, as Google and Twitter have also started to put more emphasis on mobile.
Facebook founder and CEO Mark Zuckerberg feels the company has great momentum and great opportunities for future growth. Zuckerberg is apparently already looking toward new platforms as evidenced by Facebook’s recent $2 billion acquisition of Oculus, a maker of virtual reality glasses and software.
For its current desktop and mobile platforms, Facebook is looking to incorporate more video, including video ads, a move that may challenge many mobile operators. Earlier this month, Facebook announced it had acquired the San Francisco online video ad company LiveRail.
“Video is really important,” Sandberg told investors. “It’s one of the fastest growing ad mediums out there in both desktop and mobile. … So LiveRail has a leading online video advertising platform, and we think we can use it to effectively expand video ads.”