Over the last couple of months when mobile is fast becoming the go-to platform for users of social media, there has been a shadow of doubt enveloping Facebook’s capability to bring its advertising business to its core mobile app.
For years, that niche has essentially remained a dormant source of revenue. Now, the social networking giant has seen unprecedented surge of income by monetizing its mobile app.
Market research firm reported that mobile advertising has accounted for 62 percent of Facebook revenues in the last quarter, or $2.91 billion which is a $791 million increase from the 2012 figure, after seeing a steep growth in profit that rose twice over the last nine quarters. During the second quarter as well, an additional 40 million users have joined Facebook despite a recent report that it conducted an unwarranted experiment on the emotions of its users.
As a result, Facebook recorded an all-time high of $75 per share in trading spike, which eclipses its $38 per share valuation when it went public in May 2012. But its plan to place ads on mobile devices did not make significant strides until recently after a spate of acquisitions to make that happen. Now, Facebook is set to take on Google, a search giant that dominates the advertising arena, be it on the Web or mobile platforms.
And Google is poised to keep its dominance in the industry by set about on more assertive initiatives on both platforms. Nonetheless, market analysts forecast Facebook could take a hold of nearly 18 percent of the mobile market in the United States. That market, with a value of $17.7 billion, promises real great revenue for social media.
To make its advertising more attractive to small and big brands alike, Facebook also plans to roll out video advertising into mobile devices, one of the many strategies that are still in the making.
Plus, its user base continues to expand more than ever, and that is one of the many factors that entice investors to pump more money into the business. Facebook claims that its total number of users worldwide climbed 3.5 percent from three months ago, with the daily users logging in representing 829 million of its global population.
Meanwhile, the only thing that Facebook keeps overlooking is in the area of innovation. Although it has recently bought WhatsApp, an increasingly growing mobile messaging app, and Oculus Rift, a virtual reality headgear developer, it has yet to make real money out of these acquisitions.
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