Facebook's mobile push is paying off — even if Zynga payments are down 24 percent
Mark Zuckerberg celebrated a 32 percent rise in revenue during Tuesday's third-quarter earnings call with investors, but distanced Facebook from the ailing social game studio Zynga and touted his company's recent pushes in the mobile market.
While Facebook's weak mobile development sent its share prices plummeting after its initial public offering in May, the social network said it has since rallied with third-quarter revenue to $1.26 billion.
Now, mobile makes up 14 percent of quarterly revenue.
"On the one hand, our payments revenue from Zynga decreased 24 percent this quarter — the rest of the games' ecosystem is actually growing," Zuckerberg told investors, reading from a prepared statement.
Zynga has been struggling since its initial public offering in December, and has since been shifting executives and shedding employees.
Zuckerberg said he believed Facebook would spearhead the development of more thoroughly designed ads on mobile.
"On mobile we believe ads will be more like TV," he said.
Facebook's chief operating officer Sheryl Sandberg said more precise ad-targeting tools and improved mobile apps for social network are responsible for the revenue jump.
The increased number of users lingering on their news feeds on their smartphones has led to growing revenue from sponsored and paid ads.
"We have become one of the largest mobile advertising platforms in less than eight months," Sandberg said. "We believe that no one is better positioned than we are to help marketers capitalize on the transition to mobile."
The number of mobile users increased more than 60 percent since last year, without counting Instagram, which Facebook acquired for $1 billion earlier this year.
David Ebersman, the chief financial officer at Facebook, said strongest growth was in the United States and Canada, where the price and engagement of ads in news feeds increased.
Instagram is more popular on mobile than Twitter, Zuckerberg said.