Mike Isaac

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Facebook Beats Again as Mobile Ad Revenue Surges

Facebook_F380Chalk up another win for Facebook’s finances.

The company released its third quarter numbers on Wednesday, reporting earnings per share of 25 cents on revenue of $2.02 billion, well surpassing analyst expectations of 19 cents EPS on revenue of $1.9 billion.

As was the case last quarter, the high point for the company remains mobile. Mobile revenue accounts for 49 percent of all of Facebook’s advertising dollars, a massive leap compared to just 14 percent in the year-ago quarter.

“It’s our first two billion dollar quarter, so that’s a nice milestone for us,” David Ebersman, CFO of Facebook, said in an interview. “We continue to grow the daily users of Facebook and engagement remains really strong as we execute against our priorities, particularly in mobile.”

Mobile monthly active users grew to 874 million from 819 million the previous quarter, continuing the shift as users flock from desktops to their smartphones to access the Internet. Overall, Facebook now hosts 1.19 billion users on its platform.

The numbers signal another significant win for Facebook, which since its public market debut has striven to prove that it could indeed monetize its mobile platform. Just over a year ago, the company earned little revenue to speak of from its mobile users.

“News Feed ads are working really well for us,” Ebersman said, stating it’s the number one thing driving Facebook’s business. “It’s a good product, and it enables marketers to reach a large audience of highly engaged people.”

That last bit is likely a retort to a report earlier this week from Forrester Research, which claimed that for marketers, Facebook ads “create less business value than any other digital marketing opportunity.”

He offered little detail into the company’s newest mobile ad product, the app install ads, outside of it being an “interesting and important product that [Facebook will] continue to invest in.”

As for areas of future user growth — especially internationally — Ebersman pointed to Internet.org, Mark Zuckerberg’s lofty initiative to bring the developing world online.

Shares of Facebook surged on the news, up nearly 12 percent in after-hours trading at about $55 per share.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik