Facebook Inc (FB): Truly A Mobile Company

Drive User Engagement Substantially; More Ad Placements

Facebook’s mobile user-base has been growing at a rapid rate, and now stands at 680 million, who spend a lot of time on the social media platform. With the launch of this new Facebook Home feature, Facebook will be at the very center of the users’ mobile experience. Not only will users spend more time on Facebook, but the Chat Head feature on Facebook will create very strong network effects, by encouraging more users to interact with each other.

Facebook did state that the Home product will be monetized by more ads, and as a result, Facebook’s mobile monetization will get a strong ramp up. The company’s mobile revenues run rate of more than $1.2 Billion, should be healthy increases going forward. Advertisers should love this new Facebook Inc (NASDAQ:FB) experience on mobile, as users will be on the platform all the time. As a result, more marketers will start knocking on Facebook’s door.

Research firm, eMarketer expects the social media giant to earn $965 million in mobile ad revenue in 2013. While this is a solid number, it is a very conservative projection for Facebook’s Mobile ad revenue; because it’s current mobile run rate stands at $1.2 Billion. With a deeper integration on Android devices, will further accelerate its mobile ad placements.

Going Forward

Facebook holds the No. 2 slot behind the mighty Google for Mobile Ad dollars in the U.S., and is unlikely to overtake Google in terms of mobile ad placements. However, this deep integration on Android products, will definitely aid Facebook Inc (NASDAQ:FB) substantially in building out its mobile revenue base. Facebook’s transition has surely taken place, and it’s now a mobile company for sure.

Ishfaque Faruk has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google.