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Key Numbers in Facebook’s Earnings Report

An important metric, how much revenue the social network gets from each of its 1 billion users, is roughly flat.
October 23, 2012

Facebook faced intense scrutiny from investors when it filed its second quarterly earnings report as a public company today, and the company essentially met its mark. It stopped the slide in revenue growth it had experienced over the last few quarters. 

Two numbers in particular stood out in this third-quarter report.

One was $1.29. Facebook has been on a mission to squeeze more revenue from each of its users, and there isn’t yet a sign it’s happening. Revenue per user was $1.29 in the third quarter, essentially flat from the second-quarter figure of $1.28 (see “Facebook’s Earnings Report Underscores Its Challenges”).

Another key figure: 14 percent. For the first time, Facebook revealed how much revenue it gets from ads served on mobile devices, which is 14 percent of the $1.09 billion in total advertising revenue it took in this quarter. It’s not clear yet, though, whether this figure is growing; Facebook didn’t give comparable figures for previous periods. It’s important because the company struggles to make money from the growing number of users, more than 600 million a month, who access Facebook on mobile devices. Toward this end, Facebook has been testing new advertising revenue streams, including a mobile ad network that could allow marketers to draw on Facebook user data to target ads on other apps and websites. 

CEO Mark Zuckerberg defended Facebook’s mobile strategy on a conference call with analysts, calling it “the most misunderstood aspect of Facebook today.” He noted the social network has already become one of the largest mobile advertising platforms less than eight months after launching its first mobile ads. 

He also pointed out that people who access Facebook on their mobile device have a 70 percent likelihood of visiting on a given day, compared with only 40 percent if they access the site on their desktop. He even argued that Facebook could reap more revenue, eventually, from mobile users than from people on desktop machines.

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