Mark Zuckerberg’s fortune soared $3.8 billion yesterday as shares ofFacebook Inc. (FB), the world’s most-popular social-networking service, rallied 30 percent to the highest level since May 2012.
Surging demand for mobile advertising helped profit and revenue top analysts’ estimates in the second quarter Wednesday. The earnings may quell concerns, voiced by analysts and investors since Facebook’s initial public offering last year, that the rising popularity of smartphones and tablets is outpacing its ability to make money selling promotions to mobile users.
Mark Zuckerberg, chief executive officer of Facebook Inc., in Menlo Park, California. Photographer: David Paul Morris/Bloomberg
July 25 (Bloomberg) -- Emily Chang reports on today's top news headlines on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)
“Very few people saw the pace at which the entire activity of the planet’s Internet connectivity was going to move toward mobile,” saidDavid Kirkpatrick, author of “The Facebook Effect,” a history of the company, in a telephone interview. “It’s clearly under way now.”
The gain pushed Zuckerberg, Facebook’s 29-year-old co-founder and chief executive officer, ahead of Microsoft Inc. CEOSteve BallmerandDell Inc. (DELL)chairmanMichael Dellon the Bloomberg Billionaires Index. Zuckerberg is No. 42 on the ranking with a net worth of $16.8 billion. His fortune is up 37 percent year-to-date.
Revenue rose 53 percent to $1.81 billion in the latest quarter, the company said in a statement Wednesday. Profit excluding certain items was 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion on average, according to data compiled by Bloomberg.
Facebook closed at $34.36 in New York yesterday. TheMenlo Park, California-based company traded at 149 times earnings as of today’s close, more expensive than 99 percent of the companies in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Analysts at Goldman Sachs Group Inc. increased their target price to $46 from $40, and at least 10 others also boosted projections, according to data compiled by Bloomberg.
“They’ve really done a 180-degree shift toward mobile, even if it was somewhat belatedly,” said Kirkpatrick.
In December, Zuckerberg donated almost $500 million in Facebook stock to the Silicon Valley Community Foundation. The gift to the nonprofit group, which had $2 billion in assets in 2011, is to “lay a foundation for new projects,” Zuckerberg said in a statement posted on his Facebook page.
The billionaire and his wife, Priscilla, have committed the majority of their wealth to charity.
Microsoft Corp. (MSFT)co-founder Bill Gates, 57, remains the richest person in the world with a net worth of $72.2 billion.
Mexico’sCarlos Slim, 73, is $5.5 billion behind Gates. The telecommunications tycoon’s fortune has plunged $8.5 billion this year as his main holding, a 44 percent stake in America Movil SAB, the largest mobile-phone operator in the Americas, has fallen 11 percent.
ByDouglas MacMillan&Brian Womack-Jul 25, 2013 12:34 AM GMT+0400
Facebook Inc. (FB)reported sales and profit that exceeded estimates as the operator of the world’s most popular social-networking service lured more advertisers to its mobile services, sending shares up as much as 19 percent.
Second-quarter revenue rose 53 percent to $1.81 billion, the company said in a statement today. Second-quarter profit excluding certain items was $488 million, or 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion on average, according todatacompiled by Bloomberg.
A pedestrian walks past the Facebook Inc. 'like' logo displayed on a sign at the entrance to Facebook headquarters in Menlo Park, California. Photographer: David Paul Morris/Bloomberg
Mobile made up 41 percent of advertising dollars in the second quarter, up from 30 percent in the previous period. Chief Executive OfficerMark Zuckerberg’s push to make advertising for smartphones and tablets a priority is starting to pay off, as users increasingly accessFacebookon mobile devices.
“Finally the blowout quarter that Facebook bulls have been waiting for,” saidPaul Sweeney, an analyst at Bloomberg Industries. “Among many impressive data points, I think investors will focus on the percentage of revenue from mobile of 41 percent, which was well above consensus.”
Shares of Facebook, based inMenlo Park, California, climbed as much as 19 percent in extended trading. The stock advanced 1.5 percent to $26.51 at the close in New York, leaving it down 30 percent since an initial public offering last year.
Facebook is projected to take 13 percent of the global mobile-advertising market this year, up from 5.4 percent last year according to EMarketer Inc. Still, the company remains a distant No. 2 toGoogle Inc. (GOOG), which is expected to grab 56 percent of the market in 2013.
“This quarter represents a strong validation that we’re effectively navigating the shift to mobile,”David Ebersman, Facebook’s chief financial officer, said in an interview. “All the investments we’ve been making in the business have been paying off.”
Net income attributable to shareholders was $333 million from a loss a year earlier.
Facebook has stepped up efforts with its mobile services, including updates to its smartphone applications and a new video feature for photo-sharing service Instagram. Investors’ concern that the company wasn’t shifting its focus fast enough toward wireless devices weighed on the shares in the four months following its market debut.
The number of mobile users expanded 51 percent to 819 million during the quarter. The total number of Facebook members was 1.15 billion, compared with 1.11 billion in the earlier period.
Facebook is also makingimprovementsto its advertising tools for marketers. The company said last month it intends to cut its 27 ad units by more than half, making the promotion-buying process more simple and efficient.
The social-networking provider has been wooing more large advertisers. In April, Facebook won back General Motors Co. as a customer almost a year after the automaker said it was pulling ads off the service.
“They’re getting better on their execution in the business of selling advertising,” saidMartin Pyykkonen, an analyst atWedge Partnersin Greenwood Village, Colorado. “There’s a long way to go, but things are going in the right direction.”