Tomahawk, WI 7/25/2013 (Basicsmedia) – Facebook, Inc. (NASDAQ:FB) stock gained 1.45% or $0.38 to close at $26.51 a share on July 24, 2013 but the stock surged $4.44 or 16.75% to $30.95 in after hour trading. The huge rally in the price of the stock of Facebook was the result of a growth in mobile advertising revenues that beat market expectations in 2Q2013. The number one global social networking website also reported that there has been an increase in daily visitors to the site. Analysts and shareholders were anticipating that the new set of mobile upstarts such as Snapchat and WhatsApp could make a dent in the time that people spent on Facebook.

The 2Q2013 results were the strongest since 3Q2011, asserting that the appeal of Facebook with users and advertisers has not diminished but has become better. Ad prices of Facebook has increased by 13%, while Google Inc. (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) had been forced to reduce their ad prices. According to Jordan Rohan, analyst at Stifel Nicholaus, a financial services company, Facebook has approximately 700 million daily users of the platform, the largest on earth.

The 2Q2013 results of Facebook showed that the revenues from ecommerce business doubled in 2Q2013 compared to the same period in the previous year. The year-on-year increase in the total number of ads that were displayed in Facebook expanded 43%. The quarterly results also reflected a spike of 31% in operating margins. These positive results have been able to shore up the investor confidence, since Facebook has been struggling in regaining credibility with investors after its rocky initial public offering (IPO) in May 2012. In spite of the big rally on July 24, 2013, the stock value of Facebook is around 20% below the IPO price.

Marc Zuckerberg, the CEO and co-founder of Facebook pointed out that the company has been retooling specific products in the last 18 months, especially its mobile version. In a conference call with financial analysts, Zuckerberg stated that the company turned a corner entering 2013 and was in a very good shape to go on the offensive. Internet companies have been struggling to customize their ads to be displayed properly in the small screens of smartphones and other mobile phones, even though consumers are accessing more and more web services through their mobile phones.

Facebook has introduced newsfeed ads that present marketing messages directly into the news and content stream of users. Analysts mention that the newsfeed ads of Facebook in mobile phones have been garnering much higher rates than its competitors, especially Google, even though the mobile ad prices of Google are lower than its personal computer ad prices.

The revenues of Facebook rose 53% to $1.813 billion in 2Q2013, beating the estimate of $1.618 billion by analysts. The revenues of Facebook were $1.184 billion in the year ago period. The mobile ads contributed 41% of the total ad revenues in 2Q2013, an increase of 30% from 1Q2013. The total number of Facebook mobile users was up 51% in 2Q2013 to 819 million, while the total number of members climbed to 1.15 billion in 2Q2013 from 1.11 billion a year ago.

Analysts anticipate that the market share of Facebook in FY2013 global mobile ad market could be around 13%, compared to 5.4% in FY2012. Still, it will be a distant second rank compared to Google, whose market share in FY2013 is expected to be 56%.

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