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Costs see Facebook's shares fall despite higher revenues

Higher costs ate into Facebook's profits in the final quarter of 2012, but the social network's revenues climbed as it sold more mobile advertising.

Although the results were better than expected, Facebook shares fell more than 5 per cent as a result, as investors who had bid up the stock by more than 40 per cent in the past three months booked profits in after-hours trading. The stock remains below its IPO price of $38 and closed at $31.24 last night.

Mobile ad sales made up 23 per cent of Facebook's $1.33bn in revenues, up from 14 per cent in the third quarter. It shows that Mark Zuckerberg and his company are generating money from the mobile devices increasingly favoured by internet users. Overall, profits for the quarter stood at $64m, down from $302m in the same period in 2011, as Facebook's costs rose by 82 per cent.