FB Stock Looks For Mobile Domination With Facebook Ads

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According to a recent blog post from Facebook (FB), the company is experimenting with a mobile ad network. If it works out, this could be a game-changer for the company and be a boost for FB stock.

facebook-ads-FB-stockNo doubt, Mark Zuckerberg has already done a tremendous job in getting his company into the mobile game. But it was far from easy. Consider that other companies have failed to make the transition, as seen with Zynga (ZNGA) and Microsoft (MSFT).

Zuckerberg’s efforts were certainly critical for the comeback in FB stock. In fact,  Facebook ads on mobile have exploded. In the latest quarter, Facebook ads accounted for about 49% of overall advertising revenue or about $882 million.

Yet much of this has come from Facebook’s own traffic, which includes 874 million mobile monthly active users. But in order to keep up the growth rate, the company needs to go beyond its own platform — and this means building its own mobile network for Facebook ads.

This has been critical for companies like Google (GOOG) and Apple (AAPL). Interestingly enough, Twitter (TWTR) bought MoPub in order to get a piece of the market as well.

Facebook already has the key pieces to put together a mobile ad network. First of all, it powers a large number of apps with its login function. This allows developers to access the rich data from Facebook and allow for connections with friends. This is often a great way to make an app much more engaging and useful, which is crucial for FB stock.

Facebook also owns Parse, which provides software code to help developers create more robust apps. There are more than 100,000 partners that include biggies like Cisco (CSCO), GM (GM) and the Food Network. With Parse, it will likely be fairly easy to implement Facebook ads for mobile.

Finally, the company already runs an ad network, called FBX, which is focused on the desktop. But it does not seem too much of a stretch to expand this into Facebook ads for mobile.

In terms of the monetization potential, it is certainly large and growing at rapid clip. According to report from Gartner, the global market is forecast to reach $18 billion by 2014 and hit a whopping $41.9 billion in 2017.

Much of the revenues will come from display formats but video will also be a factor (this is something Facebook has been working on as well). So this is something that is just to big to ignore and yes, Facebook stock does seem to be positioned nicely if the company wants to launch its own mobile network for Facebook ads.

We’ll get more details on this next week, when FB stock announces its fourth-quarter results.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Tom Taulli is the author of various books. They include Artificial Intelligence Basics and the Robotic Process Automation Handbook. His upcoming book is called Generative AI: How ChatGPT and other AI Tools Will Revolutionize Business.


Article printed from InvestorPlace Media, https://investorplace.com/2014/01/facebook-ads-fb-stock/.

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