Facebook announced that its fourth quarter earnings of $64 million took their revenue up by 40 percent to $1.59 billion with majority of it coming from mobile users rather than the traditional desktop users.
Mobile revenue brought the company 23 percent advertising revenue, which was a 9 percent jump from the third quarters 14 percent.
"There's no argument; Facebook is a mobile company," said CEO Mark Zuckerberg. "In 2012, we connected over a billion people and became a mobile company."
"A couple of quarters ago mobile revenues were zero percent of our ads revenue," Chief Financial Officer David Ebersman said. "Now we're up to 23 percent and believe there's a lot of growth ahead of us."
"One of the big drivers of [mobile revenue] was that as we rolled out ads in news feed, we found that it barely affected the level of engagement on Facebook," Zuckerberg said. "We thought that we could make this work over time without a big impact if we spent a long time tuning the ads, but the numbers turned out even better than we thought without much tuning."
Initially, Facebook feared that the number of ads its news feeds featured would annoy users and drive them away. However, that didn't happen, which only led to the company increasing the number of advertisements that appeared on its news feed.
Zuckerberg says the company is working on making the ads better by improved targeting and better formats. He is of the opinion that once this falls into place it will fetch far more profit than it is currently getting.
"[Facebook] said spending excluding stock-based compensation would go up 50 percent [in 2013]. That suggests [Facebook] will grow spending by $1.4 billion," Wedbush analyst Michael Pachter told CNET. "[Facebook] needs 28 percent revenue growth just to keep net income flat."
