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Facebook Inc (FB) Ramping up Mobile Monetization

After a rocky start following its IPO, Facebook Inc (NASDAQ:FB) seems to have regained its footing. Despite an enormous valuation, bullish investors continue to send the stock higher. The latest catalyst was an excellent earnings report, which beat on both the top and the bottom line. These results sent the stock soaring over 25% on Thursday. Of particular interest to investors was the company’s ability to increase its mobile ad revenue, which was seen as a problematic area by many. Now, it seems as if Facebook Inc (NASDAQ:FB) has managed to capitalize on this growing market.

Facebook Inc (NASDAQ:FB)

Big Beat

Facebook really hit it out of the park for its FQ2 2013 report. EPS came in at $0.19, well above the $0.14 consensus and up from $0.12 in the same period a year ago. Revenue surged 53% to $1.81 billion, also smoking analyst estimates of $1.62 billion. The operating margin increased about a percentage point compared to the same period a year ago, now up to 44%.

Another important gauge of Facebook Inc (NASDAQ:FB)’s popularity, daily active users increased by 27% to 699 million, whereas monthly active users increased by 21% to 1.15 billion. These are some formidable numbers, but what had analysts particularly pleased was the surge in monthly active mobile users. This figure increased a huge 51% to 819 million.

Not only the number of mobile users increased, but also the portion of revenue derived from this avenue. Mobile ads now account for 41% of advertising revenue, up from 30% in the last quarter. For many, this is evidence that Facebook Inc (NASDAQ:FB) has effectively managed to capitalize on the mobile advertising market. As a result, analyst upgrades have been streaming in, and price targets have been soaring. In any case, Facebook seems to be growing revenue a lot faster than the competition in this market.

Peer Mobile Monetization

Last week, Facebook Inc (NASDAQ:FB)’s rival Google Inc (NASDAQ:GOOG) came out with some fairly disappointing numbers, missing on revenue and whiffing on EPS. Earnings for the quarter came in at $9.56, well under the $10.78 consensus. Particularly worrying to investors was the company’s struggle with monetizing mobile ads. As mobile ads are a lot less expensive than traditional advertising, the shift to mobile devices has seen Google Inc (NASDAQ:GOOG)’s cost-per-click decline 6% year-over-year. While still the biggest name in mobile advertising, with over 50% of the market share, Google Inc (NASDAQ:GOOG) is putting a lot of work into enhancing revenue from mobile.

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