This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook 'Likes' Its Mobile Future

NEW YORK ( TheStreet) - Facebook has seen tremendous growth in its mobile user base, going from more than 350 million users in September to 425 million at the end of December. Despite mobile being listed as a risk in the company's S-1, the future of the company may depend on it.

Facebook generated $3.71 billion in revenue in 2011, but it didn't generate any "meaningful" revenue from its mobile platforms last year. Advertisers have been slow to move to mobile advertising from desktop advertising.

Facebook isn't alone in making little if any money from its mobile strategy. Google (GOOG - Get Report) has also had the same problem with its Android operating system. Apple (AAPL - Get Report) purchased Quattro Wireless, a mobile advertising company in 2010, but has done nothing with it, presumably for the same reason.

Wells Fargo analyst Jason Maynard said in a research report on Google that mobile usage is about two years ahead of mobile advertising.

Despite these short-term headwinds, Facebook clearly sees the future of mobile advertising growth. In the prospectus, Facebook noted that the mobile advertising market is expected to boom in future years, growing at a 64% compounded annual rate. The market was $1.5 billion in 2010, and is expected to reach $17.6 billion in 2015.

Facebook said it believes "that we may have potential future monetization opportunities such as the inclusion of sponsored stories in users' mobile News Feeds." Clearly the growth will come from mobile users; Facebook just has to figure out how to execute its strategy. Facebook even went so far as to say that it expects mobile growth to surpass the growth rate of overall users.

Brian Blau, research director at information technology firm Gartner, said he thinks Facebook's future is in mobile. "Facebook's stated intention is to be the social network underpinning to users around the world. They need to be from a PC-centric experience to a mobile device centric experience," Blau said in a recent phone interview.

Some have even speculated that Facebook may develop its own mobile operating system, similar to what Apple has done with iOS. This could potentially help Facebook continue to drive ad revenue away from Google, Yahoo! (YHOO - Get Report), Microsoft's (MSFT - Get Report) MSN, and other advertising portals.

Whatever Facebook decides to do with its eventual new-found fortune, one thing is clear: mobility and driving revenue from it is key. Any further initiative on that front will most definitely be something which investors hit the "like" button on.

Interested in more on Google? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends.

-- Written by Chris Ciaccia in New York

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.31%
GOOG $682.40 -0.10%
MSFT $50.50 1.63%
YHOO $27.04 1.05%
FB $102.01 0.10%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs