(MENAFN- Khaleej Times) The stock rose as much as 16 per cent to $62.30 in New York. The surge followed quarterly results in which revenue rose 63 per cent to $2.59 billion and profit excluding some items was 31 cents a share, the social network said in a statement on Wednesday. Analysts on average had projected sales of $2.35 billion and profit of 27 cents, according to estimates compiled by Bloomberg
Chief Executive Officer Mark Zuckerberg, who started Facebook a decade ago and turned it into world's largest social network, spent the last year adding more ways for advertisers to reach consumers. Users are spending more time on wireless devices, with mobile promotions generating $1.25 billion in the latest quarter and accounting for 53 per cent of ad sales, up from 49 per cent in the prior period
"Mobile is so key for them," said Laurence Balter, an analyst at Oracle Investment Research who has a hold rating on the stock. "It's going to be a big battle between Facebook and Twitter, and it's Facebook's game to lose.
Net income rose more than eightfold to $523 million, or 20 cents a share, from $64 million, or 3 cents, a year earlier
As marketers shift spending to social-media services, Facebook and Twitter are set to expand their share of the digital-ad market, according to EMarketer
By 2015, Facebook will grab an estimated 9 per cent, up from 5.9 per cent in 2012, while Twitter may take 2.2 per cent, up from 0.6 per cent, the researcher said
"The investments we've made to improve our mobile products are paying off," David Ebersman, Facebook's chief financial officer, said. "We still feel like we're really early and very much in investment mode in terms of what we're trying to build here.
Even with more digital-ad spending anticipated, Facebook has been limiting the number of ads shown in a member's main stream of messages, known as the News Feed, to avoid alienating users. That pressures the company to increase the effectiveness of their promotions and charge more for them, according to Robert Peck, an analyst at SunTrust Robinson Humphrey
Facebook said it would seek to boost the quality, or relevance, of advertisements rather than quantity, which in turn would let the company charge more for promotions. Some of that's already happening, Ebersman said, with the average effective price of ads up 92 per cent compared with the prior year. For many users, Facebook is no longer a shiny new service. The company next week will celebrate 10 years since Chief Executive Officer Mark Zuckerberg founded the social network in a Harvard University dorm room. The company had 1.23 billion monthly active users in December - a 16 per cent increase from the prior year - with 945 million of them on mobile phones
Facebook has said younger teens aren't using its website as much as they used to. The company last year offered $3 billion to acquire Snapchat, an application popular with teens for sending annotated photos that disappear, which the startup turned down, a person familiar with the matter has said. "If Facebook isn't a teen product, then the teens are using Instagram, which is also owned by Facebook, so I think the fear is a little exaggerated," said Eric Steiman, who owns Facebook in a portfolio of $5.5 million at Covestor Ltd
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