FB Makes Profit Through Ads

Social networking site, Facebook Inc has reported quarterly revenue that topped analysts’ estimates, fueled by the mobile advertising business.

The company’s social network’s fourth-quarter sales totaled $3.85 billion, exceeding the average analysts’ prediction of $3.77 billion. The percentage of ad sales from mobile phones was 69%, up from 66% in the third quarter.

The profit, however, excluded some items that were 54 cents a share, compared with 48 cents projected on average by analysts. The company’s net income rose to $701 million in the fourth quarter, compared with $523 million a year ago. Expenses were $2.72 billion, up 87% from a year earlier. The results are an early indicator of the progress made by Facebook in building an ad-sales machine beyond its main property. The Menlo Park, California-based company is now fast expanding selling promotions on mobile applications and sites across the Web, complete with new technology to track individuals’ responses to the ads no matter what device they’re using. The move has helped boost revenue, even as Facebook has warned about increased spending ahead on new initiatives and acquisitions such as Oculus VR and WhatsApp. Nate Elliott, an analyst at Forrester Research Inc said, the expansion of advertising beyond the walls of Facebook is vital to the realization of their potential,”

Facebook CFO David Wehner had said in October that the company’s fourth-quarter revenue growth would face a tough comparison to a year earlier. That’s because the last quarter of 2013 was the first holiday season where Facebook rolled out ads in members’ News Feeds on a large scale, which helped spur results at the time.

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