New York - Nearly three-quarters of Facebook's advertising revenue now comes from mobile ads, as many more users access the social network on smartphones and other hand-held gadgets.
On that front, the company is doing fine - better, even, than it has in previous quarters. But the rate of its overall revenue growth slowed in the first three months of this year, causing its high-flying stock to tumble after the results came out.
Wednesday marked the first time since early 2013 that Facebook failed to top Wall Street's expectations with its results, and shares of the Menlo Park, California, company fell more than 2% after-hours trading.
Facebook has grown mobile ad revenue steadily since 2012, when it started showing ads for the devices' smaller screens. In the previous quarter, mobile represented 69% of total advertising revenue.
The social network had 1.44 billion monthly active users as of March, up 13% from a year earlier. The number of users who accessed Facebook on mobile devices at least once a month grew 24% to 1.25 billion.
Facebook's share of the $42.6bn worldwide mobile advertising market was 17.4% in 2014, according to research firm eMarketer, up from 16.4% a year earlier. In comparison, Google's share was 38.2%, down from 46% a year earlier.
Income
The company reported adjusted earnings of 42c per share in the January-March quarter, above the 41c per share that analysts polled by FactSet were expecting. Revenue increased 46% to $3.54bn, from $2.5bn a year earlier. Analysts had expected $3.56bn.
Net income declined as Facebook's expenses grew 83% from a year earlier. The company earned $512m, or 18c per share, down 20% from $642m, or 25c per share.
Facebook, which bought the popular photo-sharing app Instagram and the messaging service WhatsApp, has been coming out with its own stand-alone mobile apps to capture more of the time people spend on phones. Besides its Messenger app, though, Facebook's home-grown efforts have had limited success.
On Wednesday, it introduced Hello, a voice-calling app designed for Android phones. In essence, it's meant to replace the voice dialler on your phone. But based on Facebook's inability to persuade users to install its Home app, which lets Facebook take over the home screen on Android, users may not be too keen on replacing existing smartphone tools with Facebook-branded versions.
Facebook finance chief David Wehner said mobile "continues to be a key driver" of Facebook's growth. He said Facebook will continue to experiment with apps for mobile. For now, the money-making focus is on Facebook itself and, slowly, on popular, established apps such as Instagram.