"I think Facebook is going to have to find a different way to monetize mobile that isn't about little display ads," said Melissa Parrish, an analyst at Forrester Research, referring to Sponsored Stories.

Chris Silva, of Altimeter Group, called Sponsored Stories "blunt instruments."

"Facebook is leading now for lack of anybody coming along and innovating," he said.

Facebook will likely need to undertake substantial improvements to its mobile platform, analysts said. It has yet to introduce location-specific advertising, they noted. And it will need to support on its mobile platform interactive "rich media" advertising, which advertising insiders say appears to be most effective for marketers. Facebook will also need to make better use of its user data to target ads to users who are most likely to be interested in what they promote, the analysts said.

The IDG News Service