Facebook revealed its latest earnings today, and they were a landmark moment in the company's development: Facebook has cracked the hardest nut of getting you to look at ads on your smartphone.
Advertising on mobile devices now accounts for 76% of the company's total advertising revenue, or $2.9 billion. Facebook's revenue for the June quarter surged to $4.04 billion and beat Wall Street estimates.
Facebook, in other words, has learned better than any other social network how to turn your profile into space it can sell to advertisers. Twitter and LinkedIn have struggled with the same task.
When Facebook went public in May, 2012 it generated almost no revenue from smartphones.
Those smaller screens are the most appealing to advertisers, because they're the ones that are always with us.
"Mobile is the engine of our revenue growth," Sheryl Sandberg, Facebook's chief operating officer, said on a conference call with analysts after the earnings release.
That mobile growth is going to increase, most likely. Facebook's expenses grew 82% year-over-year to nearly $2.8 billion for the quarter as the company is said to be in "investment mode."
Unlike Twitter, which was hammered by investors this week for stalled user growth, Facebook continues to grow its already staggering user base. Facebook reported having 1.49 billion monthly active users for the quarter and is now closing in on one billion daily active users. Of those, 1.3 billion access Facebook each month from smartphones and tablets.
Twitter, by comparison, has been stuck around the 300 million monthly active user mark throughout this year. On Tuesday, the company revealed that it had added just two million active users to its desktop and mobile applications, not counting those who sign up for Twitter the old-fashioned way, through SMS.
In recent weeks, Facebook has begun tugging on more levels to make money off that massive user base.
Last month, Facebook opened the floodgates for more advertising on Instagram, after years of being slow to ramp up monetization. Instagram introduced new ad formats and better ways to target the more than 300 million people who use the photo-sharing service. eMarketer, an independent research outfit, estimates Instagram will bring in nearly $600 million dollars in mobile ad revenue this year.
Facebook is also moving fast to transition the social network from photo-focused to video-focused, putting the Internet company in a better position to own a piece of the lucrative video advertising market. To that end, Facebook earlier this month announced its first video ad revenue split with a select group of high-profile publishers.
"Our video demand is very deep," Sandberg said on the earnings call. "Our growth is being driven by our ability to do this broad-based consumer advertising, but do it in a more targeted way."
"Investment sentiment has been positive in '15 for Facebook shares, but has grown incrementally more positive recently in our view, given explosive video growth on the platform and the broad opening of the Instagram platform to advertisers," John Blackledge, an analyst with Cowen and Company, wrote in a research note ahead of the earnings report this week.