More and more users are now using mobile devices to access Facebook rather than the desktops and this trend is starting to worry Facebook. Facebook with its 900 million odd users is the world’s favorite social network on the desktop as well as on the move.
A recent report by comScore’s new Mobile Metrix 2.0 showed U.S. smartphone users spent 441 minutes per month, or 7 hours and 21 minutes, on Facebook in March, compared with 391 minutes via computer. That’s miles if not light years ahead the second and third place Foursquare and Twitter with 146 minutes and 114 minutes respectively, while Tumblr drops in at fourth with 68 minutes.
You might be wondering with such great stats in their favor why on earth would Facebook be worried? Facebook is ahead of its competition without doubt but when you compare Facebook on the desktop with Facebook on mobile, then it gets really interesting. According to Reuters, Facebook has about 158.9 million unique U.S. visitors who access the site on computers and 78 million who access it via mobile phones, although there is an overlap between the two groups, which essentially means that the number of people who are accessing their facebook accounts on the move is fast closing in on those who access it on the desktop.
Now this is where it gets interesting, you see when Facebook filed its IPO it highlighted the fact that it does not generate meaningful revenue from mobile users.
“If users increasingly access mobile products as a substitute for access through personal computers and if we are unable to successfully implement monetization strategies for our mobile users, our financial performance and ability to grow revenue would be negatively affected.” – Facebook wrote in its filing documents.
This essentially means that even though Facebook would be delighted with the increasing traffic in terms of the exposure it is getting on mobile devices, it is skeptical about generating more revenue from the mobile platforms. Facebook hasn’t been too keen to show ads to mobile users, but starting now all that might change.
The changes made to the filing indicate that Facebook is clearly concerned about how to grow its mobile revenue in order to sustain its incredible financial growth. In fact The Telegraph went on to report that the statement was effectively a ‘profit warning’. Some analysts are saying that the move to buy Instagram for $1 billion was part of Facebook’s efforts to increase mobile revenue.
“It was a reactive, almost panicked reaction to usage statistics” Sam Hamadeh, founder, research firm PrivCo to The Telegraph.
Facebook also recently announced the app center, a place to find all social apps for mobile users. They are also introducing popular apps like the game Draw Something, on Apple’s and Google’s app stores and guess what, they will take 30% share of revenues. These are indeed being done to further increase user engagement and – generate more revenues from the mobile devices.
Facebook’s valuation is fast approaching $100 billion and of course they are very publicly going public with the IPO and expecting to break all previous IPO records in the history of Silicon Valley based IPOs. So it is but obvious that after the IPO they need to not only continue growing but sustain those high levels of growth, which (if at all possible) can be achieved by strategically monetizing their mobile revenues.