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Facebook mobilizes, successfully

Facebook’s strong second-quarter earnings were propelled by mobile-ad revenue.

A couple years ago Facebook had to prove it could figure out how to make money off its mobile services.

Consider it done. 

Revenue from mobile ads helped propel the company’s profit to $800 million in the second quarter, up from $333 million a year earlier.

Those ads feature products like furniture or detergent, and they now appear — like it or not — as regularly as your friends’ adorable baby photos in your Facebook mobile news feed.

“The mobile ads business is growing faster than anyone had anticipated,” says Ben Schachter,  internet analyst with Macquarie Capital, which invests in Facebook.

Google still owns the mobile ad space. The search giant took in 42 percent of all U.S. mobile ad revenue last year, according to the research firm eMarketer. Facebook commanded about 16 percent. But Google has been losing ground and Facebook is coming on strong.

“The thing is they’re growing so fast, there’s already the question, when are they going to take over Google,” says Karsten Weide, vice president for media and entertainment at International Data Corporation.

But there are some tougher questions, too, like how Facebook is going to keep up its daily user base, which didn’t grow in the latest quarter, and how Facebook plans to make money off new services like private messaging and virtual reality.

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