Facebook Shows Rapid Growth in Mobile Ads

In the time since Facebook's IPO on May 18th, analysts and observers have cooled their outlook on the social media forerunner. Between falling share prices -- a 49% drop since the IPO -- and doubts surrounding the company's ability to generate revenue from mobile advertising, Facebook became a bit of a punching bag. The mood persisted despite CEO Mark Zuckerberg emphasizing the company's longterm goals and a pledge to prioritize user experience above signaling immediate growth. 

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According to a report from Bloomberg, sources say Facebook has surpassed estimates for mobile advertising in 2012, generating $150 million from mobile ads in Q3 compared to approximately $10 million in Q2. Success with several new services aimed at directing users to promotions on tablets and smartphones has given the company a rapid boost in a mobile market that has left many uncertain about how to effectively monetize. 

About 60% of Facebook's 1 billion plus members now access the service on mobile devices, up from 47% last year. This shift, together with Facebook's introduction of services such as Sponsored Stories, Promoted Posts, and "Facebook Exchange", has driven up mobile ad prices by 7%, with a 27% increase in total ads delivered. As the company has increased investment in monetization, ad revenue grew 36% in Q3. 

While EMarketer Inc. still projects that Facebook will rank sixth in U.S. mobile advertising for 2012, the rapid growth could silence some critics and lend optimism to Facebook's trajectory after months of skepticism following the IPO. The company now generates 14% of its revenue from mobile ads, accounting for a 2.8% share of of the U.S. mobile ad market in 2012. Currently, Google ranks number one with a 55% share, up 3% from 2011.