Facebook shares rise 17% to record $62.50 on increasing ad revenue

Facebook Inc reached a key milestone last quarter with over half of its advertising revenue coming from mobile devices, sending shares up to an intra-day record at $62.5 yesterday.

The surge came on results that saw revenue rise 63 per cent to $2.59 billion with profit excluding some items at 31 cents a share, according to a statement by the Menlo Park, California-based social network on 29 January.

Analysts on average had projected sales at $2.35 billion and profit at 27 cents, according to estimates compiled by Bloomberg.

Chief executive officer Mark Zuckerberg, who started Facebook a decade ago and turned it into the largest social network in the world, worked on adding more ways for advertisers to reach consumers, last year.

Users are now spending more time on wireless devices, even as mobile promotions generated $1.25 billion in the latest quarter, which made up 53 per cent of ad sales, up from 49 per cent in the prior period.

"After disappointing earnings from large-cap internet stocks like eBay and Yahoo, it was refreshing to see FB crush Q4 consensus estimates, with accelerating trends in its core advertising business," CRT Capital analyst Neil Doshi wrote.

While the total number of ad impressions on Facebook was down 8 per cent, according to some analysts, it was due to the company's shift to mobile.

According to Macquarie (USA) Equities Research analyst Ben Schachter,  Facebook had focused on improving the quality and relevance of advertisements, rather than boosting ad load, in order to drive revenue growth, Reuters reported.

With marketers increasingly turning to social-media services, Facebook and Twitter were set expand their share of the digital-ad market, Bloomberg reported quoting EMarketer,  which said last month that by 2015, Facebook would garner an estimated 9 per cent, up from 5.9 per cent in 2012, while Twitter might take 2.2 pe rcent, up from 0.6 per cent.

Meanwhile, Twitter would report its first earnings as a public company on 5 February.

Bloomberg quoted David Ebersman, Facebook's chief financial officer, as saying in an interview that, the investments the company had made to improve its mobile products were paying off.