Mobile ads help Facebook's Q1 revenue grow 38 per cent to $1.46 billion

Facebook Inc, the world's biggest social networking company, on Wednesday said nearly a third of its advertising revenue came from mobile in the first three months of the year, helping to push total revenue up 38 per cent to surpass Wall Street's expectations.

Revenue grew to $1.46 billion from $1.06 billion, above analysts' expectations of $1.44 billion.

The Mark Zuckerberg-led company's net income was $219 million, or 9 cents per share, in the January-March period. That's up from $205 million, or 9 cents per share, in the same period a year ago, when it was still private.

Excluding special items, mainly related to stock compensation expenses, Facebook earned 12 cents per share, matching the average of analyst expectations, according to FactSet.

The California-based Facebook said its mobile advertising revenue was 30 per cent of its total ad revenue in the first quarter, amounting to $375 million. That's up from 23 per cent, or $306 million, in the fourth quarter. In the third quarter - the first time it disclosed such figures - the company generated 14 per cent, or $153 million, of its advertising revenue from mobile.

Investors had been worried about Facebook's ability to grow mobile revenue since before its initial public offering (IPO) in May 2012.

That's because although the number of people who access Facebook on smartphones and tablet computers has been growing quickly, Facebook didn't begin showing ads to those users until last year.

David Ebersman, Facebook's chief financial officer, said most advertisers did not specify that their ads be shown only on desktop computers or only on mobile devices, "rather they put their ads into our system and allow us to show the ads on whatever device where the ads will perform best".

Facebook started showing mobile advertisements in early 2012. In the third quarter of last year, the company generated 14 per cent, or $153 million of its advertising revenue from mobile. In the fourth quarter mobile ads represented to 23 per cent, or $306 million.

Research firm eMarketer says Facebook's share of the US online advertising market is growing. This year, the company is expected to take a 6.5 per cent share of US online ad spending, up from 5.9 per cent in 2012. Still, that figure is far behind Google Inc.'s 41.6 per cent.

On the mobile front, eMarketer expects Facebook to take a 13.2 per cent share of US ad revenue, up from 9.5 per cent in 2012, the first year it made any money from mobile ads.

Though Facebook is No. 2, it is far behind Google in US mobile advertising. EMarketer expects the online search leader to take a 54.7 per cent share of US mobile advertising revenue this year.