Facebook Is a ‘Mobile Company,’ But Is That a Good Business?

“Facebook is a mobile company,” said Mark Zuckerberg. Investors seem to be arguing about whether that is a good thing.

Mobile accounted for 23 percent of Facebook’s total ad revenue last quarter, the company said. Considering it was 14 percent in the third quarter, growth is going in the right direction. But mobile revenue still significantly lags actual usage as 680 million people, or 64.2 percent of Facebook users, are browsing the service on their phones. Competition will also be tough. In the U.S. mobile ad market, Facebook is estimated to have a 12 percent share this year, which would be dwarfed by Google’s 57 percent, according to EMarketer. None of these signs should cause investors to unfriend Facebook in droves, but the top executives shouldn’t necessarily be jumping up and down over the results. The question about whether the great shift to mobile computing would unravel Facebook’s business has dogged the company ever since its initial public offering last year. Despite the intense optimism from its executives, who all mentioned the inroads being made in mobile advertising, Facebook’s performance last quarter doesn’t put those concerns to bed. Facebook acknowledged as much in today’s filing with the Securities and Exchange Commission, which lists the familiar risk factor: “our ability to monetize our mobile products.”