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TheStreet Open House

Facebook's Mobile Move

Stocks in this article: FBZNGAGOOG

Facebook introduced Gifts in the quarter, allowing users to send gifts to other users for special occasions, or just because. Anmuth believes that Gifts will not have a meaningful impact in the near term, as Gifts is only in the U.S. market, but could be huge over time.

"If 10% of U.S. users purchased $20 gifts 4 times per year in 2013, we estimate it would equal nearly $100M of revenue for Facebook," Anmuth wrote.

Payments-related revenue is the other major source of revenue outside of advertising, with Facebook collecting a percentage of gaming and other payment-related revenue done on its Web site. The majority of Facebook's Payments revenue come from Zynga (ZNGA), but the relationship between the two companies has weakened over time. In November, the two companies amended their agreement so that Zynga will no longer have to display Facebook ads or use Facebook payments on its own Zynga.com properties. Under the amended deal, Facebook can also develop its own games.

With Zynga performing so poorly, Raymond James analyst Aaron Kessler isn't expecting much from Payments revenue this quarter. "We remain more cautious on Payments and other revenues over the near term given the slower outlook for gaming revenue growth. As such, we are modeling essentially flat growth in 2013 for Payments and Other revenues," Kessler wrote in a report. He rates Facebook "outperform" with a $38 price target.

There's been increased optimism surrounding Facebook since the last earnings report, as CEO Mark Zuckerberg and his team seem to have given Wall Street what they want. We'll find out after the close Wednesday whether the trend continues.

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

-- Written by Chris Ciaccia in New York

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