Facebook tops Wall Street revenue target in fourth quarter
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Facebook Inc's (FB.O: Quote) revenue grew 49 percent in the fourth quarter, as mobile advertising growth helped the world's largest Internet social network beat Wall Street's targets for earnings and sales.
But revenue growth was the weakest since the start of 2013, and spending rose faster. Facebook shares fell about 2.6 percent in after-hours trade after vacillating above and below the closing price.
Facebook's business has boomed thanks to its mobile ads for smartphones and tablets. Its success contrasts with other established Internet companies such as Google Inc (GOOGL.O: Quote) and Yahoo Inc (YHOO.O: Quote), which have struggled as advertisers shift more and more to mobile devices from personal computers.
"They are taking share of advertising dollars online. They are taking share of overall advertising budgets," said Ronald Josey, a JMP Securities analyst, noting the strong quarter.
The company said on Wednesday it ended 2014 with 1.39 billion monthly users, with 86 percent of them accessing its service on smartphones and other mobile devices.
Mobile ads accounted for 69 percent of advertising revenue in the fourth quarter, or $2.48 billion.
Many investors are betting that video ads, which Facebook began offering last year, will provide the company's next leg of growth.
Chief Financial Officer Dave Wehner said in an interview the company still had a lot of hard work to do and was optimistic about video. "We have great marketer interest in video. It's a creative medium that they know how to use effectively," he said. Continued...