Concerns about Facebook’s ability to monetize its growing mobile traffic have resurfaced following its first earnings report since its IPO in May.
The social media giant yesterday posted a 2Q12 loss of $157 million, sending its stock price tumbling to $24 a share – which means its shares are now trading at two-thirds of the value they sold for during the IPO.
At the same time, the growth of mobile users on Facebook’s network continued to outstrip overall user growth. Whilst overall monthly active users registered 29% year-on-year growth, to 955 million, mobile monthly active users grew by 67%, to 543 million – more than half its user base.
Yet, as Facebook admitted ahead of its IPO, it doesn’t “directly generate any meaningful revenue” from its mobile products and its ability to do so successfully is “unproven” – although it did say in its earnings call yesterday that it had seen some good results from the mobile ads it has been experimenting with lately.
But Facebook is not alone among the big online brands to have disrupted the mobile space in recent years that are coming up short in terms of extracting advertising dollars from their mobile traffic.
Google’s declining CPC
The biggest online advertising brand of all, Google, also published its 2Q12 results in recent days. Although its overall numbers look very healthy, this was the third-time running that it posted a year-on-year drop in its average cost-per-click (CPC) – the money bid by advertisers to place ads on its search results. Its CPC was down by 16%, an accelerating trend that started in 4Q11 with an 8% YoY drop.