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

February 3, 2013
12
723

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