Facebook finally has proof that it can make money from mobile advertising.
As part of last night's third-quarter results, the world's biggest social media company disclosed for the first time that some 14% of its ad revenue came from mobile advertising.
The company had started showing ads to users who access Facebook from their phones and tablet computers about six months ago.
Since before its initial public offering in May, investors had been concerned that Facebook was not taking advantage of its mobile user base.
Facebook's quarterly results - Facebook's second as a public company - sent its stock sharply higher in after-hours trading. The stock jumped 9.7% to $21.40 after the announcement.
Facebook said it posted a loss of $59m, or 2 cents per share, in the three months from July to September.
That is down from earnings of $227m, or 10 cents per share a year ago, when Facebook was still privately held.
Excluding special items, mainly related stock compensation expenses, Facebook earned $311m, or 12 cents a share, in the latest quarter, a cent better than what analysts were expecting.
Revenue rose 32% to $1.26 billion from $954m. That is also higher than the $1.23 billion that analysts had expected. Facebook's monthly user base grew 26% from a year earlier, to $1.01 billion. Some 60% of users access Facebook using a mobile device, the company said.
"I want to dispel this myth that Facebook can't make money on mobile," said chief executive Mark Zuckerberg in a conference call with analysts.
"This may (have seemed) true earlier this year because we hadn't started trying yet,'' he added.
"People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform," Zuckerberg said.
"At the same time, we are deeply integrating monetisation into our product teams in order to build a stronger, more valuable company,'' he added.
Advertising revenue was $1.09 billion, up 36% from a year earlier, and representing about 86% of Facebook's total revenue. Revenue from payments and other fees climbed 13% to $176m.
The figure includes Facebook's cut from the virtual items people buy for games they pay on the site. Facebook said that while payments from Zynga declined, its overall games ecosystem has become more diverse.
In recent quarters Facebook has derived as much as 12% of its revenue from "FarmVille" maker Zynga, but Zynga has been experiencing a slowdown. Zynga said last night that it is laying off about 5% of its workforce of 3,000 people.
Facebook did not provide guidance for the current quarter or beyond, a practice it has maintained since its first earnings report as a public company in late July.
Facebook's stock has been trading at roughly half of its initial public offering price of $38. The May IPO was one of the most highly anticipated offerings in recent years, but the excitement quickly deflated - in part due to concerns about Facebook's ability to grow mobile ad revenue. The stock has not traded above its IPO price since its first trading day.
