Facebook shares soar as advertising is made to pay

Ad sales over £1bn in quarter for first time as overall revenues up more than 53%

Adam Withnall@adamwithnall
Thursday 25 July 2013 09:14
Facebook's quarterly results reveal huge surge in advertising revenues
Facebook's quarterly results reveal huge surge in advertising revenues

The money Facebook made from advertising soared over £1 billion for the first time in the financial quarter from April to June, resulting in revenues 53 per cent higher than in the same period last year.

The value of shares in the world’s largest social network surged as the strong results, including a major breakthrough into mobile, were hailed as “good progress” by founder Mark Zuckerberg.

The company’s revenues for the second quarter – 88 per cent of which came from advertising – rocketed to almost £1.2 billion, up from £770 million for the same time a year ago.

More people are also using the platform than ever before, with an average of 699 million logging on every day in June, an increase of more than a quarter on last year.

And the number of unique users accessing Facebook on mobile devices rose by 51 per cent to a total of 819 million for the month of June.

The boost to revenues means Facebook has leapt into the black, making a net profit of £217 million compared to a net loss of £102 million a year ago.

That result represented a significant disappointment after what was one of the largest and most high profile first public offerings with the company’s floatation on the stock market last May.

It raised questions as to how Facebook could build its portfolio of advertising options without discouraging users who tend to regard the presence of brands as intrusive.

But yesterday’s results suggest a remarkable turnaround since the company had £31.2 billion wiped from its value just months after it became public.

Founder and chief executive Mark Zuckerberg said: “We've made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile.

”The work we've done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future.“

Simon Wharton, managing director of digital marketing agency PushON, said: ”As a listed company, the fundamental challenge for Facebook is how to monetise the site without alienating its users. We're still to see if it's making progress in that direction.

“At some point soon we're expecting the world's biggest social network to announce video ads as the new big revenue builder. But while this will be seen as a positive by shareholders, Facebook is again focusing more on the money to be made from advertisers than the experience of its users.”

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