subject: Facebook Fails To Make Money On Mobile [print this page] As a social networking site created in 2004, Facebook was not designed to work primarily with mobile devices. The world's largest social networking site has been slow to develop its capability to optimize user experience on mobiles, and more importantly, on monetizing in the said platform.
Facebook has been criticized for putting its major effort on the Web while doing relatively little about its mobile products. Last May 9, Facebook revealed more details about the site's slow response to mobile devices as a move to update its IPO filing.
The report said that there's a growing number of users trying to access Facebook on mobile devices where the company has inadequate capabilities in place to maximize monetary returns. The paper is part of Facebook's update to its regulatory paperwork as it files for an initial public offering that will take place sometime this month. The company has already warned its potential investors about its mobile devices problems and its lack of mobile monetization.
Facebook coughed up some details about the problem by sharing that about 488 million monthly active users are accessing Facebook through mobile devices in March.
With its 901 million global active users, the 488-million-active-users figure is obviously a huge chunk. The number is also growing faster than expected. The first three weeks of April saw Facebook users topped the 500-million mark alone.
Facebook became a worldwide sensation after its debut in 2004 but it has been slow to react to the bloom of mobile devices. It has been slow to develop apps to optimize mobile devices trying to access Facebook. Even the popular iPad series only received its Facebook app in October 2011. That is a full year and a half after the iPad was released worldwide. The delay encouraged third party applications to jump in and grab the opportunity to monetize.
A scheme to draw revenue other than web during the early 2012 saw the introduction of "sponsored stories" on Facebook mobile apps. This move is yet to prove itself successful in the coming months.
It is known that 85% of Facebook's revenue in 2011 came from advertising totaling almost $2.3 billion. At the moment, most of Facebook's ads are displayed as images, banners, and banners--ignoring the mobile platform for too long.
While work is ongoing to address this missed opportunity, the next important step of monetization is also slow going.
Facebook executives have been grilled over and over again when the company is expected to make money on mobile devices. Zuckerberg admitted that Facebook is having trouble making a good working plan to address the issue.
CFO David Ebersman revealed that the company is doing "heavy investment" at this time and recognized that Facebook knows that mobile use is critical to long-term user engagement. He said that mobile advertising is still in its infancy and so far, no innovations are acceptable to maximize it.
He did, however, calmed would-be investors that the company will put more investment in mobile even if monetization out of it is still uncertain and slow to bear fruit.
One good news of such a move was Facebook's move to acquire the hugely popular mobile startup Instagram in a $1 billion purchase.
