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Facebook profit rise fueled by mobile ad growth

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(Globalpost/GlobalPost)

A rise in mobile ads helped Facebook boost its first-quarter profit 58 percent from a year ago to $217 million, and lift revenues past market forecasts.

In results released Wednesday, Facebook said its monthly active users rose 23 percent from a year ago to 1.11 billion, including 751 million who accessed the network on mobile devices.

Mobile ads accounted for 30 percent of advertising revenue for the quarter.

The profit adjusted for special items was just below market forecasts at 12 cents per share. But revenues were better than expected, rising 38 percent from a year ago to $1.46 billion, the California firm said.

"We've made a lot of progress in the first few months of the year," said Facebook chief executive Mark Zuckerberg, co-founder of the leading social network.

"We have seen strong growth and engagement across our community and launched several exciting products."

Company highlights during the first three months of this year included the launch of "Facebook Home" software that puts the social network center stage on Android-powered smartphones and the launch of a set of new ad products.

Facebook's share over the overall US online advertising market is expected to rise to 6.5 percent this year from 5.9 percent in 2012, according to industry tracker eMarketer.

Meanwhile, the overall US digital ad market surged 14.8 percent to $9.64 billion in the first quarter of this year, eMarketer reported.

Spending on advertising on mobile devices such as smartphone and tablets in the United States is expected to surge to by more than $3 billion to $7.29 billion this year, with Facebook's share growing to 13.2 percent, eMarketer forecast.

Facebook shares have been under pressure since its highly anticipated public offering a year ago.

The shares, which were offered last year at $38, lost 1.2 percent Wednesday to stand at $27.43 and showed modest movements in after-hours trades.

A key question for Facebook looking ahead is its Home software suite for mobile phones, which has gotten a lukewarm response.

The software weaves the social network into the homescreen of phones powered by the latest versions of Android to focus experiences on "people and not apps."

"We're not building a phone and we're not building an operating system, but we are building something that's a lot deeper than an app," Zuckerberg told a gathering at the company's headquarters the Silicon Valley city of Menlo Park.

As of Wednesday, Google's online Play shop indicated that Home had been downloaded fewer than 15,000 times and it its overall rating was two stars on a five-star scale.

"Good start/idea, but it needs more options and features," a Home user with the screen name Jonathan Rodriguez said in a review.

The software, which allows users to see Facebook's "Cover Feed" when they turn on their phones, will be available for download from Google's online Play shop in the United States starting April 12.

A version should be available in Europe in the coming months, according to Facebook, which said it was in the process of tailoring Home for tablet computers.

"This is just the first release," Zuckerberg said of Home during an earnings call with financial analysts.

"Over the next few months we hope to push this out much more broadly and get it in the hands of a lot more people."

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http://www.globalpost.com/dispatch/news/afp/130501/facebook-profit-rise-fueled-mobile-ad-growth