Facebook revenues increase 38 per cent

Facebook's revenues soared by 38 per cent over the first quarter, the social network said yesterday, as it earned more from mobile ads and grew its user base to over 1.1 billion active users every month, up 23 per cent in year on year terms.

The company's profits came in at $219m, or 9 cents on a per share basis, as revenues climbed to $1.46bn.

The jump in mobile revenues was a key feature of the figures. Back in the third quarter of last year, mobile advertising made up around 14 per cent of the social network's ad revenues. That rose to around 23 per cent in the final three months of 2012. This year, in the first quarter, mobile advertising represented around 30 per cent of Facebook's ad revenues.

The trend is being closely watched by analysts, given the growing number of consumers who spent more time on the internet on their smartphones and other mobile devices than on their laptops or desktops. Facebook said that its ad revenues rose as its mobile monthly active users rose at a year on year rate of 54 per cent to 751 million.

Overall, the company's advertising revenues climbed to $1.25bn.

The rising mobile revenues should provide support to Facebook's share price, which remains stuck below the company's IPO price of $38. Last night, they closed at $27.43, though they rose in extended trading when the results were announced.

Across the US market, mobile advertising expanded by 178 per cent last year to more than $4.1bn, according to figures from the research firm eMarketer. It is forecasting an increase in spending to over $7bn this year, to over $27bn by 2017.

Facebook accounted for just under 10 of US mobile ad revenues last year, a figure which is projected to rise to over 13 per cent this year.

Last night's figures also showed progress at Instagram, the photo-sharing service that Facebook bought for around $1bn. The first quarter saw Instagram's user base expand to 100 million per month.