Advertising Revenue at Facebook Surges

Facebook expanded its revenue from advertising by over 64% during the third quarter. The increase was boosted by an increase in mobile ads that have become an increasingly larger chunk of the social media giant’s overall ad business.

The increase indicates that the social network has been successful in steering its advertisers to its mobile platform during a time when the majority of members are using Facebook on tablets or phones.

Initially investors were worried about the company’s ability to become successful in mobile advertising. However, it seems all those concerns are now gone.

Although the results at Facebook surpassed Wall Street expectations, investors pushed the stock down shortly after the numbers were released, possibly spooked from comments made on a conference call that 2015 would be a year with significant expenses.

The company announced that is expected costs to increase by between 55% and 75% in 2015, as it increases its investment in its staff, growing its existing products as well as in areas like Oculus, WhatsApp and video.

In 2014, Facebook expensed $22 billion in stock and cash to acquire WhatsApp a messaging service and close to $2 billion for Oculus, the company that specializes in virtual reality.

The stock at the company based in Menlo Park, California dropped 11% during extended trading.

Revenue from advertising ended the quarter at $2.96 billion. Revenue from mobile advertising, a figure that is closely watched ended the quarter at $1.95 billion, which represented 66% of the total revenue from advertising at Facebook during the quarter.

That 66% was up from the second quarter figure of 62% and the first quarter figure of 59%.

The company, which is 10 years old, started offering mobile advertising in 2012.

At this time, Facebook is moving into the highly lucrative advertising area of video ads. Earlier in 2014, the company re-launched Atlas, its tool for marketers wanting to better target individuals across different devices, publishers and platforms as well as measure how effective the ads are.

One analyst said that the move with Atlas and the acquisition of the video advertising platform LiveRail signals that Facebook is undergoing an important shift.



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