Facebook (FB) officially launched new application advertising service to all developers today released. Facebook has been testing a new mobile advertising model over the past few months, which is targeted to other applications. Developers are able to publish advertisements on the Facebook site and its mobile applications through this new service. When users install mobile applications of Facebook, developers pay Facebook fees.
As Facebook has a massive volume of users, and the mobile user base is rapidly growing, suggesting that users are willing to download the Facebook applications, and those users will be the natural audience of these ads. Mobile game vendor TinyCo said the click-through rate of its ads has increased 50%. Online-dating service provider Zoosk and E-commerce site Fab also have begun to test ads.
Facebook has been preparing for this business, and firstly launched App Center with a variety of applications in May this year, which was introduced to the international market subsequently. Statistics showed that App Center and the ads integrated in user’s news feed could boost the visits of the various applications. Facebook has been already considering how to transfer traffic into revenues. This will also help increase the loyalty of iPhone developers and Android developers to the Facebook platform, because if developers intend to release products on the Facebook, they have to integrate Facebook’s social function into their applications.
See another effort Facebook has been doing to expand its business: with the fast growth in Facebook’s users, especially the international users, the company has begun to set up business units around the world to meet users’ needs. Facebook opened an engineering center in London, which is the first engineering center outside the United States. Facebook is currently recruiting staffs for the Centre. It must be pointed out that, although this is the first engineering center established by Facebook outside the United States, but this is not the first time that Facebook sent engineers to London. As London is the center of the global digital advertising industry. Facebook has sent engineers to cooperate with the local advertisers on social marketing services in London.
Citing a research report, Bloomberg reported that there are indications that Facebook has generated more-than-expected advertising revenue from the mobile users. Boosted by good news, Facebook stock rose over 2.04%, to close at $19.88 on the Nasdaq Stock Exchange on Wednesday. Currently, Facebook users have exceeded one billion. Wedge Partners analyst Martin Pyykkonen believes that Facebook’s current mobile advertising revenues are better than the consensus estimate. And by the good news, Facebook shares are traded to close at $ 19.88 per share.
Facebook has felt tremendous pressure from investors, and the industry hopes Facebook is able to prove that the company’s mobile client has the ability to attract more advertisers and the bring more revenues. The previous statistics showed that tablet PCs, and smart phones could not derive more mobile advertising revenues by comparison to traditional desktop computer ads.
Earlier this year, Facebook has acknowledged that advertising revenue growth of the company had not kept up with the pace of expansion of the users. According to survey by Bloomberg, analyst averagely estimate Facebook’s third quarter revenue would increase 29%, to $ 1.23 billion. This is much inferior to 32% growth in the second quarter, and also implys that Facebook’s revenue growth has started to slow down. Facebook is scheduled to publish the third quarter results on October 23.
The current Facebook stock price is 13.28% above the historical low of $17.55 and 55.82% below the historical high of $45.00. Dragged by the slowdown in the growth of revenues and slow paces in the field of mobile advertising, Facebook stock price has lost 47.68% from its IPO price of $38. Facebook currently has a market value of $45.59 billion.