Zuckerberg touts mobile during Facebook's earnings announcement
Mark Zuckerberg thinks mobile devices represent a big opportunity for Facebook to expand user engagement while bolstering the social networking company’s ad revenue.
“Our opportunity on mobile is the most misunderstood aspect of Facebook today,” he said on Tuesday during a conference call to discuss his company’s quarterly earnings.
Users who access Facebook from smartphones and other mobile devices are more engaged than those who access the service from PCs, he said. Mobile users are more likely to access Facebook on any given day than PC users, he said.
Critics have said Facebook needs to provide a better mobile experience for users and advertisers, and Zuckerberg admitted in September that Facebook’s mobile strategy focused too much on HTML5 instead of on building native applications.
During Tuesday’s conference call, Zuckerberg acknowledged that improvements in the mobile products were needed. “Over the past year, a lot of people gave us feedback that our mobile apps were too slow,” he said.
The company took several steps to improve its mobile experience during the quarter, including revamping its iOS application and releasing new development tools for iOS and Android. It also closed its acquisition of the popular mobile photo-sharing app Instagram.
An upgrade to the Android application is in the works. Plus, the stand-alone Facebook Messenger mobile application, which lets users communicate both with Facebook and non-Facebook contacts through site notifications and regular text messages, also was upgraded for iOS and Android.
Zuckerberg said he thinks the company will eventually generate more revenue from mobile than desktop usage, in particular because mobile ads are integrated more “organically” into the Facebook experience.
Development groups at the company have been put in charge of building revenue-generating elements for their products, which is already yielding good results, according to Zuckerberg.
Monthly active users were 1.01 billion as of Sept. 30, up 26 percent year over year, while daily active users were 584 million on average in September, up 28 percent. Mobile active users were 604 million as of Sept. 30, up 61 percent.
Facebook has been under pressure to cheer up its disappointed investors. On Tuesday, it reported revenue growth of more than 30 percent while still recording a loss. Facebook’s revenue for the third quarter, ended Sept. 30, rose 32 percent to $1.26 billion, compared with $954 million in the third quarter last year, and exceeded the $1.23 billion that financial analysts had expected, according to a poll by Thomson Reuters. Its net loss was $59 million, or 2 cents per share, compared to net income of $227 million, or 10 cents per share, reported last year.
In addition to its mobile moves during the quarter, Facebook also made an e-commerce one, launching its Gifts service, which encourages people to buy presents for friends.
It also launched several new ad products, and generated 14 percent of its ad revenue from mobile.
Zuckerberg reiterated the company’s commitment to its application platform, and said Facebook wants to be the platform of choice for all third-party developers who want to add a social networking component to their applications and sites.
Regarding games, Zuckerberg said that while revenue from embattled gaming developer Zynga dropped 20 percent during the quarter, payments revenue from other game developers grew collectively by 40 percent.
Ad sales during the quarter accounted for 86 percent of revenue, while payments and other fees made up the rest.
Costs and expenses shot up 64 percent to $885 million, though excluding stock-based compensation and related payroll tax expenses, costs and expenses were up 57 percent, to $737 million.