Facebook turns a corner, has more mobile visitors than desktop visitors and why that’s causing them to fail

February 3, 2013

facebook It’s no surprise to anyone that there is more being done on mobile phones. With the exception of complicated processes like programming and large applications like AutoCAD, pretty much everything else can be done on a mobile device or a tablet. This includes things like surfing social networks like Facebook. As it turns out, people actually do surf Facebook more often on a mobile device than they do on computers.

The Verge reported a few days ago that Facebook has finally hit that point where users are more often on a mobile device than a computer or a laptop. It was reported that in the month of December 2012, 680 million users were active monthly. That’s more than half.

This is a big deal for Facebook for many reasons. Not all of them are good reasons either. With Facebook being available on most mobile devices, this includes feature phones, that means people can be on Facebook everywhere. When you have a billion customers, that’s a feature you really need to succeed. The bad news for Facebook is that they haven’t properly monetized the mobile part of their operation yet, and with this comes problems

How does mobile use over desktop use affect Facebook’s earnings?

It’s really quite simple. Facebook, like Google, makes the majority of its revenue in advertisement money. According to their quarterly earnings report, they made $1.3 billion in revenue from ads in Q4 2012. That’s about 83% of their entire revenue which totaled just over $1.5 billion.

Now for the problem. Those who still use Facebook on their Android devices, open the official app and look for an advertisement. There really aren’t very many, if any at all. If you don’t view advertisements, Facebook doesn’t get any advertising money. What ends up happening? Well, reports show that Facebook gets about $1.54 in revenue per user. This is far below Google’s $7 in revenue per user. This translates into losses. According to The Verge, that loss came out to $59 million in Q4, 2012.

This has pretty much everyone concerned. Especially the people at Wall Street and the Facebook stock holders. Despite having roughly one sixth of the entire world population as a customer, Facebook is still reporting losses. There are a lot of reasons for this. A lot of people are transferring over to other social networks or simply aren’t visiting the site as much. The biggest, though, is that Facebook’s mobile applications simply don’t draw the money that the site does.

So what is everyone’s take on this? Could Facebook make up for lost money by any advertising more on their mobile apps? More importantly, will that cause more people to leave Facebook because, you know, ads are annoying? Let us know your opinion.

Comments

  • terminator

    Does Facebook even have a decent app for Android that is taking over the world? Not to talk of being able to monetize the mobile world

    • JosephHindy

      Believe it or not, Facebook has actually greatly improved their Facebook app for Android over the last few months. It is WAY better than before

      • Phill

        It’s improved, but it’s still really poor

        • JosephHindy

          yes, but the fact it’s improving shows that they know it needs improvement. then it’s just a matter of waiting for them to finish improving it :)

  • http://twitter.com/myconoclast Dave

    The question is what changes can be made that won’t alienate existing users and I’m not sure there are many. I predict Google Plus will overtake Facebook within five years.

    • http://www.facebook.com/bhairavpardiwala Bhairav Pardiwala

      although i do like this comment i dont think it will take that much time !
      all google has to do is compile all info sources into google plus

  • browse

    I’m using both Facebook and Google+ with my mobile
    phone. Honestly, they are not losing their users. How
    could they lost if you mentioned that more user are
    using mobile device. Its just only mean that Facebook
    mobile version is way to far against the google+. Google
    plus should make their website more mobile friendly as well. If I rank both social probably 9 for facebook, 8 for
    google plus; and 7 for twitter… 1-10 the highest the better.

    My oh my here is my website I value mobile users not only
    those who are using desktop. So I made a website that is
    mobile friendly as well. http://www.kwentology.com

  • http://twitter.com/KrRay03 Kaushik Ray

    the try to capture potential of mobile ads will cause users to stay away from the site..! it will be interesting to see how FB uses the potential. If ppl here knows abt this FB ppl must be knowing this..!!

  • Noah

    That’s funny, I completely forgot about those stupid ads because on my desktop I block them with Chrome :D

    And the tablet Android app is so bad I don’t even bother (when will they finally catch up with the iPad version?).

    On a smartphone ? Who needs to check FB on a phone anyway? Unless you are stuck in a place for days and don’t have anything else to do, I’d rather enjoy whatever I’m doing at the moment and wait until I’m in good conditions for a decent experience with FB (meaning a large screen, a keyboard and a mouse). That’s one more sad example of how little sensible most people are.

  • http://www.facebook.com/Santi.FernandezD Santiago Fernández Devoto

    I have iOS and Android devices, I have FB for not giving same updates to the android app as they give it to the iOS version….

  • FrillArtist

    Yes just what we need. More ads in our apps and mobile devices. >_>

  • http://twitter.com/umairulhaque Umair Ulhaque

    It is a wonderful achievment for facebook even in the smartphone mobile platform