When Facebook said it was focusing on its approach in mobile, it was serious from the first initial step. It was in 2014 when Facebook started really focusing on mobile, and they outcome came out better than expected.
Facebook, just like any social media networks, rely heavily on its number of users. More always means better. By focusing on mobile, Facebook was aiming to get more people to its social network. And all the efforts come with a big reward: for the seventh straight quarter, the company topped Wall Street profit and revenue forecasts as it won even more mobile advertising revenue.
Facebook saw the shift of users from desktop computers to smartphones and other mobile devices. The social network has determined since that since then, it is becoming a "mobile first" company.
By tapping into the place where it has no plan long ago, Facebook's two-third revenue now comes from its mobile ads. The company's advertising revenue increased 53 percent to $3.59 billion in the fourth quarter of 2014. And from that number, 69 percent came from mobile.
"We're very pleased with the growth of our business," said CEO and founder Mark Zuckerberg in a conference call with investors discussing the results.
Facebook first started selling mobile ads in 2012, the same year the company released its IPO. In just a couple of years, Facebook's growth in the mobile advertising business is seen as one of the most interesting pivot, and turnover in the internet's history.
Facebook's success contrasts with other internet-established companies such as Google and Yahoo!, which both have struggled as advertisers shift more and more to mobile devices from personal computers.
Since the company began hosting its own video, opposing the use of third-party services, such as YouTube, Facebook said that from the 3 billion daily video views, 65 percent of them were played by mobile users.
"In just one year, the number of video posts per person grew 75 percent globally," said Facebook's COO Sheryl Sandberg during the investor call.
The improvement on how the company shifted is making it enter the territory that is led by Google. With its promising growth, the company is still a long way from rivaling the search engine giant that have 31 percent of the internet advertising traffic. Facebook, in early 2015, has 8 percent.
But as long as the direction of the graph is up, Facebook is expecting more and more ad dollars flowing into its cash flow. And with that, the company is expecting to see more success in the upcoming moments.
Facebook reported fourth-quarter revenue of $3.85 billion, an increase of 49 percent from $2.59 billion in the fourth quarter of 2013. The company earned $701 million ($0.25 per share), in the fourth quarter, up from $523 million ($0.20 per share), in the same period a year ago.
The company also said that its revenue was affected by the strong dollar, which will result in 5 percent lower revenue in 2015 compared to what it would have been at 2014's exchange rates.
Despite the company's share went down about 2 percent in after-hours trading, the stock is up more than 40 percent since 2013. Those numbers have exceeded analysts expectations.
As Facebook continues to add more users to its already enormous user base by many means possible, the company is expecting more growth margin.
The Menlo Park, California-based company said that it had 1.39 billion monthly active users at the end of the year 2014, up 13 percent from a year ago. Daily users hit the number 890 million, up 18 percent. Mobile users rose to 1.2 billion, up 26 percent.
Despite the improvement in revenue and the number of users, Facebook also stated that the total cost jumped up to 87 percent to $2.72 billion in the fourth quarter. Spendings on research and development went more than a double, and part of it was driven by a huge increase in stock payouts to employees.
Zuckerberg warned investors in late 2014 that the company's expenses were going to rise sharply. He pledged that Facebook will invest aggressively in new areas, some of them are experimental, and that includes Oculus that it had acquired.
With the achievements, these doesn't make Facebook in a hurry to monetize everything it has in its disposal. This means that the company is taking its time to make money from separate services it owns, including Instagram, a photo-sharing service which has 300 million users, and WhatsApp, which has 700 million.
Zuckerberg compared the life stage of those services to the early days of Facebook. He described in that early days, Facebook was focused on getting more users rather than making money.
"It's really important to get this right and not rush it," he said. "The most important thing is to help people and businesses connect, create business opportunities and then you get a small amount of the value that you are creating."
