Shares of Facebook (FB) are soaring in early trading after the company posted results that made a mockery of analyst estimates. The quintessential social network posted EPS of 19-cents, 5-cents ahead of expectations on revenues of $1.81 billion.
What impressed the Street more than the nickel beat was the way FB accomplished the feat. Mobile advertising grew from virtually nil to more than $650 million, a full 41% of the company's total ad revenue and up from 30%.
"Nearly half a billion people use Facebook on their phones everyday and soon we’ll have more revenue on mobile than on desktop as well," crowed CEO Mark Zuckerberg on a star-studded conference call.
For Facebook believers the quarter was something akin to the collapse of the Berlin Wall.
"Facebook has gone through a historic transition," said David Kirkpatrick, CEO of Techonomy and author of "The Facebook Effect". "If you look at any significant number they were up and they were up more than anybody would have expected."
Not only did users migrate to mobile but Facebook was able to grind more revenue out of them. Average Revenue Per User (ARPU) ramped 25% to $1.60. That puts ARPU on a run-rate of $6.40 compared to about $4 before the company went public.Read More »from Facebook Shares Soar After Earnings Blow the Bears Away