Facebook's Remarkable Transformation into a Mobile Company

Yesterday Facebook reported Q4 and full-year earnings figures. The company strongly beat earnings estimates and reported revenues of $7.87 billion for the full year. Facebook said that Q4 2013 revenues were $2.34 billion, which was a nearly 80% increase from the previous year.

Mobile was 53% of total ad revenue for the fourth quarter of 2013, or $1.24 billion. That's roughly what the company earned in total ad revenue in Q4 of 2012. Facebook's revenue growth is accelerating as it emerges as a clear number two alternative advertising platform to Google. 

Facebook also reported: 

  • 1.23 billion monthly active users globally 
  • 757 million "daily active users" and 556 mobile daily active users
  • 945 million mobile monthly active users 
  • 296 million mobile only users 

What's striking is that the mobile and PC numbers are getting very close. Facebook has effectively transformed itself into a mobile (marketing) company, where most of its users are largely if not primarily interacting through the site's apps. 

Recently Facebook took steps to launch its long-awaited mobile ad network for apps. Assuming that Facebook goes "all in" it would become the second largest or potentially the largest mobile display network in the world. Four years ago we anticipated this

It also introduced Custom Audiences retargeting for mobile.  

In addition, Facebook is pursuing a new strategy: starting to launch a number of stand-alone mobile apps outside of its flagship Facebook app. Those include Instagram (which it acquired), Messenger and now mobile "news" app Paper. This approach will enable Facebook to potentially appeal to different market segments and use cases, as well as create new mobile ad inventory for the company. 

Facebook CEO Mark Zuckerberg also said on the Facebook earnings call yesterday that Graph Search would be coming to mobile "pretty soon." That promises to be very interesting and could have significant implications for local-mobile search. Indeed one could imagine a stand-alone local search app from Facebook (to rival Yelp, etc.). To date, its "Nearby" functionality has been buried and not really lived up to its promise.