Facebook 4Q Results Surpass Expectations

Facebook's monthly user base grew 25 percent from a year earlier to 1.06 billion accounts. About 680 million of them access Facebook using a mobile device each month. The company also said that the number of mobile users who access the site every day surpassed daily users on the Web for the first time in the fourth quarter.

As of the stock market's close on Wednesday, Facebook's stock was up 60 percent since the company's third-quarter earnings report came out in October. But it still hasn't hit its initial public offering price of $38.

The May 18 IPO was by far the biggest one for an Internet company since Google's in 2004, but the excitement quickly deflated. With Wall Street now clamoring for even more mobile ad growth, Facebook's toughest task will be to increase the number of ads on the social network without alienating users.

Pachter suspects that investors may be worried Facebook's expenses are starting to outstrip its revenue growth. That was the case in the fourth quarter when the company's costs, excluding employee stock compensation, soared 67 percent from the previous year to $849 million, mainly due to hiring and infrastructure costs such as data centers and servers. And Facebook promises to keep on spending.

David Ebersman, Facebook's chief financial officer, said Facebook expects total expenses, excluding stock compensation costs, to grow by about 50 percent in 2013. In 2012, these costs amounted to $2.83 billion, an increase of 63 percent from 2011.

The company ended the year with 4,600 employees, a 44 percent increase from the end of 2011.

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AP Technology Writer Michael Liedtke contributed to this story from San Francisco.

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