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Facebook shares profit growth story

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Facebook on Wednesday reported that is quarterly profit more than doubled amid big gains in ad revenues and a jump in users. 

Facebook on Wednesday reported that its quarterly profit more than doubled amid big gains in ad revenues and a jump in users

Net income leapt to $791 million during the three months ended June 30 in a 138 percent increase from the $333 million made during the same period a year earlier, the world's biggest social network said.

"We had a good second quarter," Facebook co-founder and chief executive Mark Zuckerberg said in the earnings release.

"Our community has continued to grow, and we see a lot of opportunity ahead as we connect the rest of the world.

Revenue in the quarter surged to $2.91 billion, with approximately 62 percent of that money coming from ads served up on mobile devices such as smartphones or tablet computers.

Ad revenues overall were up 67 percent from a year ago to $2.68 billion.

Cashing in on the trend of Facebook members increasingly using mobile devices to connect to the social network has been seen by analysts as vital to its success.

The number of people who visited the online social network at least once a month climbed to 1.32 billion in a 14 percent rise from the same quarter last year, according to Facebook. The number of active users on mobile devices rose to 1.07 billion.

- Share price jumps -

Facebook shares jumped more than three percent to $73.80 in after-market trades that followed release of the earnings figures, near record highs for the company that made its market debut in 2012 at $38.

"The numbers look good; this is a very strong quarter for them," said analyst Rob Enderle of Enderle Group in Silicon Valley.

"They look more like a real company now than a dot-com. Tactically, they are doing well."

Facebook could potentially face some push-back from advertisers over how well ads result in people actually spending money on what is being promoted, the analyst noted.

Silicon Valley-based Facebook had a 5.8 percent share of global digital advertising revenue in 2013 and that share is expected to near eight percent by the end of this year, according to industry tracker eMarketer.

Worldwide spending on digital advertising was predicted to hit $140.2 billion this year.

Facebook will likely lay claim to 22.3 percent of the money spent this year on advertising on mobile devices, with Google's share expected to remain about 50 percent, according to eMarketer.

The worldwide mobile ad market should grow by nearly 85 percent this year to reach $32.71 billion, the market tracker forecast.

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