I get the feeling that analysts didn’t quite know what to make of Facebook’s Q4 results. In after hours trading, first the shares dipped by 10% - then recovered all those losses. The headlines show the confusion. One says “Facebook sees sharp drop in profits”, the next says “Facebook has massive surge in mobile ads”.
Facebook’s Q4 revenues increased by 40% to $1.59b. But profits were just $64m compared with $302m in Q4 2011. Mobile ad sales doubled to $306m (qoq). Mobile now accounts for 23% of Facebook’s ad revenues – a bit lower than analysts had expected. As we have said many times before, Facebook has to monetise mobile to survive. It is starting but has a long, long way to go. Facebook penetration in many markets has reached saturation. Indeed I hear more of people abandoning it than joining. I can’t remember acquiring a new ‘friend’ in the last year but have seen many ‘sign out’. I don’t think I am alone.
In 2012 Facebook had revenues of $5.09b and currently have a market value of $68b – a mere 14x sales! I’d say they had much to prove in 2013.