Facebook shares soar as users, mobile ads climb

Jul 25 2013, 09:33 IST
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SummaryFacebook is the world's No. 1 social network also reported an uptick in daily visitors to its service.

useful place to show ads," he said.

Last week, Google reported second-quarter results short of Wall Street's estimates as weakening prices for its ads weighed on the bottom line, and Yahoo trimmed its 2013 sales outlook.

TEEN USERS

Facebook said about 61 percent of its 1.15 billion users now visit the service on a daily basis, compared to 58 percent in the second quarter of 2012. That increase came despite worries that in-feed ads will alienate viewers, and that a new crop of mobile services popular among a younger crowd, such as Snapchat, would siphon off users.

Zuckerberg said Facebook had not experienced the feared flight of teenage users in the United States, noting that the number of teen users in the country on a daily and monthly basis had been steady over the past year and a half.

"You always have to keep an eye on it, but they're certainly not running out the door," said Jefferies analyst Brian Fitzgerald. Shares of Facebook were up 16.7 percent at $30.95 in after-hours trading on Wednesday.

Facebook grew revenue 53 percent to $1.813 billion in the second quarter, above the average analyst expectation of $1.618 billion, according to Thomson Reuters I/B/E/S. Facebook had $1.184 billion in revenue in the year ago period.

The company said that mobile ads accounted for roughly 41 percent of its total ad revenue in the second quarter, up from 30 percent in the first quarter of the year.

Chief Operating Officer Sheryl Sandberg said the company had increased both the quantity and types of newsfeed adds during the second quarter, even as click-through rates and cost-per-clicks, or ad rates, remained strong.

"Right now, ads on average make up about 5 percent, or one in 20 stories on the newsfeed," Zuckerberg told analysts. "In recent studies, people have told us that they notice the ads more. So we're going to invest in improving the quality."

Facebook grew revenue 53 percent to $1.813 billion in the second quarter, above the average analyst expectation of $1.618 billion, according to Thomson Reuters I/B/E/S. Facebook had $1.184 billion in revenue in the year ago period.

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