Facebook on a mobile roll

With strong earnings report and Facebook Home release, company makes big push into mobile services

Facebook last week cited mobile growth as a major contributor to its first-quarter increase in sales and profits.

So does that mean the company that just a year ago, cited mobile as one of its biggest risks has swiftly mastered it?

No, said several analysts, who would be hard pressed to name any company that has mastered mobile . Yet, at least one analyst would give Facebook high honors for coming so far in such a short time.

More work in mobile services is still needed to get in front of the movement that is taking over the online world.

"Mobile was certainly their most-improved area, and that's good because it has been the monkey on their back for a long time," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "Neither Facebook, nor any company has mastered mobile, but they do get the most improved award. Their previous experience was horrible and now they have some of the best mobile apps out there."

During Facebook's first-quarter earnings report Wednesday, the company reported revenue of $1.46 billion for the quarter ended March 31, an increase of 38%.

Mobile advertising constituted 30% of the company's total ad revenue.

A growing mobile user base also played a big role in the social network's overall user base.

Facebook reported that its monthly active user based increased by 23% to 1.11 billion, while its monthly active mobile users jumped by 54% to 751 million.

Facebook has been striving to turn mobile from a burden into a benefit.

Last spring, the world's largest social network listed mobility among its "risk factors" in an amended filing with the U.S. Securities and Exchange Commission. The company admitted that the quickening shift from traditional desktop or laptop computers to mobile devices was hurting Facebook's advertising plan, since it had no way to monetize this growing mobile trend.

Since then, Facebook released a mobile app that has become the most popular in the U.S.

Last year, the company acquired Instagram, a popular photo-sharing app, and delivered new development tools for iOS and Android.

In January, at the company's fourth-quarter and year-end earnings meeting, executives said they were driving a mobile company.

To drive that idea home, last month the company unveiled Facebook Home, a launcher that sits on top of the Android operating system.

Facebook was going all in with mobile, which is exactly what the company needs to do, Moorhead said.

"It's fish or cut bait time for Facebook mobility," he added. "Facebook is very fast and nimble, just what you want in a company trying to master mobile. But Facebook has a half-baked approach with Facebook Home. It's not a phone and it's not an app. That's confusing for consumers and the ecosystem."

Rob Enderle, an analyst with the Enderle Group, said Facebook is throwing a lot of money at mobile services, the company shouldn't appear to be in a "blind panic" over it.

"Facebook appears more focused on speed than in moving in the right direction," he added. "They need to fix Facebook Home and make it into a more compelling offering. It actually isn't a bad idea. They just haven't thought it through or executed well around it."

Hadley Reynolds, an analyst with NextEra Research, also said he foresees "limited" success for Facebook Home. However, he expects Facebook to continue to focus on mobile and push hard.

"In five years, there will be no discussion of mobile, because that is where most people will be interacting online, including with Facebook," he said.

This article, Facebook on a mobile roll, was originally published at Computerworld.com.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed . Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

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