FACEBOOK showed signs of putting its many troubles since May’s botched flotation behind it yesterday, as Mark Zuckerberg’s company beat expectations and displayed impressive growth in selling adverts on mobile phones.
The social network’s earnings release last night showed that Facebook’s turnover had risen to $1.26bn (£790m) in the third quarter of the year, up 32 per cent year-on-year. The results sent Facebook’s shares up 8.5 per cent in after-hours trading as revenues beat analyst forecasts.
The company posted a $59m loss due to share-based payouts, but more significantly, Zuckerberg revealed that the company was taking 14 per cent of its advertising revenue from mobile phones, just six months after introducing adverts on the platform.
The halving of Facebook’s share price since its glitch-ridden initial public offering (IPO) in May has largely been put down to the seismic shift in how people access the service, with many commentators saying Facebook would not be able to sustain revenues due to the difficulty of placing adverts on a mobile phone screen.
“I want to dispel the myth that Facebook can’t make money from mobile,” Zuckerberg said last night. “It gives us the opportunity to reach more people because in the coming years there will be billions more smartphones than desktops.”
The results also showed a seven per cent rise in sales on the previous quarter. During the period, the firm closed its $750m purchase of photo-editing app Instagram, hit 1bn users, and opened a London engineering hub.
“As proud as I am that 1bn people use Facebook each month, I’m also really happy that over 600m people now share and connect on Facebook every month using mobile devices,” Zuckerberg said.
The results were not good news for everyone, however. Facebook saw a 20 per cent drop in payments from Zynga, the troubled game developer that has seen growth slow since last December’s IPO. Zynga reports third-quarter results today.