Facebook Inc announced a 76% improvement in mobile advertising revenue in their second quarter report, igniting a 20% share rally for the world's largest social network.
The company reported a US$656 million surge of net profit compared to the first quarter despite facing increasing competition from rivals such as WhatsApp.
"It's pretty healthy on both the top and bottom line. We're seeing accelerating growth, particularly in mobile," said Colin Sebastian, R.W. Baird analyst about the net gain. "That's important because it confirms that advertisers are spending more, allocating more budget to Facebook. The ads seem to be working."
Facebook redesigned its mobile format to accommodate newsfeed ads which allow the direct streaming of marketing messages into the user's home page as a strategy to overcome advertising challenges posed by the fast-paced mobile environment.
Facebook also shared that around 700 million of its 1.15 billion existing users now visit the site on a daily basis, as opposed to the 665 million reported by the end of the previous quarter.
"Right now, ads on average make up about 5 percent, or one in 20 stories on the newsfeed," said Facebook CEO Mark Zuckerberg on a conference call. "In recent studies, people have told us that they notice the ads more. So we're going to invest in improving the quality."
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