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Why Facebook Is Even Scarier Than You Realize

NEW YORK (TheStreet) -- On the surface, Facebook's (FB - Get Report) second-quarter earnings report was scary-good enough. But the details under the hood held even more ammo for investors who want to bet that Federal Reserve Chair Janet Yellen is wrong about social networking stocks.

The numbers knocked the snot out of Wall Street's expectations. Revenue of $2.91 billion was $100 million more than forecast, and earnings per share of 42 cents beat forecasts by a dime. The really impressive part, though, was the breadth in the number and platforms and types of advertising Facebook is now beginning to move.

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Investors have already focused on Facebook's expansion into mobile advertising sales, which rose 151% in the quarter and are now more than three-fifths of Facebook's revenue. The piece emerging now is Facebook's promising tests in areas like video advertising, and the surprising strength of mobile as a platform for brand advertising that drives longer-term purchasing plans as well as impulse buying. As those  happen, the company's long-term goal to boost annual revenue toward $20 for each of its users gets closer, and easier to focus upon.

Facebook's magic number has long been $20 per user -- the figure one of its early investors privately quoted to a bunch of reporters over dinner the night the company filed for its 2012 initial public offering. Back then, it was commanding a little above $4, and the second-quarter report puts sales per user at $8.96 now (up from $8 in the first quarter). It's a rough guide to how close Facebook is at any one time to what it will be when it grows up.

That metric points to plenty of growth still to come -- and the proliferation of platforms is the primary reason why it now looks easily achievable.

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