Facebook says mobile ads successful, but analysts say challenges remain

27.07.2012
Facebook seemed to answer at least one burning question about its mobile business on Thursday -- it doesn't plan to build its own smartphone -- but it's still not entirely clear how it will capitalize on its rapidly expanding base of mobile users.

"Building out a whole phone wouldn't really make much sense for us to do," said CEO Mark Zuckerberg on Thursday, when asked about Facebook's mobile strategy during a conference call to discuss as a public company.

The number of people who access Facebook's service from mobile devices is expanding rapidly. The company had 955 million monthly active users at the end of June, of which 543 million accessed Facebook from a mobile device, the company said Thursday. That was up 67 percent from the same quarter last year, it said.

But Facebook continues to face a problem it laid out in its pre-IPO filings: It makes less money when users access its service from a mobile device than from the desktop. That fact contributed to the poor performance of Facebook's initial public offering.

On Thursday, Facebook said that its user base grew more quickly last quarter than the number of ads it serves, as users spend more time on its service using a mobile device. That reflects the fact that Facebook displays fewer ads to mobile users.

But Facebook pointed to early indications that the ads it introduced to mobile users in June will boost its mobile revenue. Its early analytics suggest that Sponsored Stories on mobile devices are performing relatively well, Facebook said. By the end of June, Sponsored Stories were generating around US$1 million per day, it said, with about half on mobile devices.