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Facebook’s Mobile Strategy in 2013

Daily Ticker

Shortly after its historic IPO in May, Facebook (FB) stock lost half of its value as investors became increasingly anxious about the social network’s ability to make money from mobile advertising. The stock has recovered some ground in recent weeks because CEO and co-founder Mark Zuckerberg has publicly addressed these concerns, according to David Kirkpatrick, author of The Facebook Effect.

“People just needed to be convinced that Zuckerberg realized that mobile was a big deal,” Kirkpatrick says in an interview with The Daily Ticker. “He has made that extremely clear. They are explicitly putting mobile at the top of the list in everything that they do.”

Effectively monetizing mobile has become the core challenge for all Web sites and Facebook’s struggles to earn revenue from mobile ads won’t go away in 2013, Kirkpatrick notes. But recent efforts by the company to target its 1 billion global users on smartphone devices and tablets could attract new advertisers. Facebook’s News Feed tool has the most potential for mobile ad displays, according to Kirkpatrick, and Facebook engineers are focusing on designing new apps and interfaces for mobile first, with PC versions to follow afterward. Facebook’s problems are not just how to increase mobile ads but also delivering and displaying them in a way that are not intrusive or offensive to users, Kirkpatrick says.

Mobile comprised 14% of Facebook’s $1.09 billion in total ad revenue in the third-quarter and the company made roughly $3 million a day from ads shown in its mobile News Feed. According to eMarketer, Facebook could earn the highest amount of mobile display revenue than any other mobile publisher next year because of its ability to redistribute revenue from mobile to desktop. The social networking site is also on track to reach 18.4% of the U.S. mobile display advertising market in 2013.

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