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Facebook revenue surges 40%

Jan 31 2013 07:20
San Francisco - Facebook's  advertising business grew at its fastest clip since before the company's May initial public offering, helping the company's revenue expand 40% to $1.585bn.

Shares of Facebook were down 2.5% to $30.45 in after hours trading on Wednesday.

Facebook said its mobile business accounted for 23% of total ad revenue, compared with 14% in the third quarter.

But some investors may have been expecting more.

"Mobile revenue was expected to be a little higher," said Aaron Kessler, an analyst with Raymond James, who said he was looking for mobile revenue to be 25% of total ad revenue.

"Overall a solid quarter but maybe high expectations going into the quarter," said Kessler.

Facebook shares, which lost more than half their value following its May initial public offering, have regained ground in recent months as concerns about its mobile ad business and insider selling have eased. Shares have surged roughly 60% since mid-November.

Facebook, the world's largest online social networking service, said net income in the fourth quarter was $64m, or 3 cents a share, compared with $302m, or 14 cents a share in the year-ago period.

Excluding certain items, Facebook said it earned 17 cents a share.

Facebook has ramped up its online advertising services in recent months, putting a greater emphasis on mobile ads and introducing capabilities that let marketers target Facebook users based on their web browsing history.

Advertising revenue in the fourth quarter grew 41% to $1.33bn, with mobile ads representing 23% of Facebook's ad revenue.

Facebook's overall fourth-quarter revenue was $1.585bn, versus $1.131bn in the year-ago period.

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