On today’s Facebook earnings call, one theme is clear: It’s all about mobile.
The company, needless to say, was happy with its performance in Q4 2014 and in the year as a whole. “We got a lot done in 2014. Our community continues to grow and we’re making progress towards connecting the world,” Facebook CEO Mark Zuckerberg said. Revenue for 2014 came in at $12.47 billion, with income from operations in 2014 at $4.99 billion and net income at $2.94 billion. Zuckerberg added that it was a “good quarter and a great year,” emphasizing that the average user spends 10% more time on the service compared to last year.
Facebook also emphasized global expansion plans, including its relationship with Internet.org, during the earnings call. Zuckerberg says international growth will take “a lot of effort,” and that they want to reach the entire global population.
Over the past few months, Facebook’s financials have been doing better than expected. Per-share net income rose to 25 cents a share from 20 cents a share a year earlier. Much of that is due to the healthy growth of Facebook’s advertising mechanism, which is helping Menlo Park greatly as it continues to monetize Instagram, WhatsApp, Oculus, and other recent acquisitions.
One of the biggest pieces of news was Facebook’s stellar growth in mobile ad earnings; growth in daily mobile active users is quickly outpacing its overall growth in daily active users, according to its fourth quarter report.
And in the end, it’s all about mobile. Mobile advertising revenue turned out to be an impressive 69% of total ad revenue for Q4. In Q4 2013, mobile ad revenue accounted for only 53%. Facebook’s controversial decision to spin off instant messaging into a separate Messenger application has largely been met with a shrug by users. In exchange for accessing Facebook messages (and, if users choose, SMS or MMS messages) through a standalone product, the company is gaining access to a large stream of both data to leverage and potential freemium products in the future. WhatsApp and a new Facebook Lite app for Android, meanwhile, are positioning Facebook in an extremely favorable way as a titan on the global mobile market.
Messenger and WhatsApp were also cited by Zuckerberg as examples of the company’s future, citing their high user numbers. He also mentioned increased investment in Facebook search to find content for mobile and desktop, along with catering the service to the needs of their user community. Zuckerberg also said the company is actively working with app developers to better serve their needs, with the goal of turning Facebook into a “really cross-platform platform.” COO Sheryl Sandberg also emphasized a 75% global increase and 94% American increase growth in videos posted by the average Facebook user.
The big news to keep in mind here is that Facebook, which was criticized heavily in 2012 and 2013 for its lack of mobile chops, has successfully transformed itself into one of the biggest players in the mobile advertising and application ecosystems. Missteps such as Graph Search don’t matter at much at this point; Facebook is sustaining internal growth, raising funds for acquisitions, and making shareholders happy through their mobile dominance.