Why Facebook’s Mobile Ad Revenues Are Critical

Facebook’s mobile ad revenues continue to soar

Mobile ad revenues now account for most of Facebook’s (FB) revenue and reached $8 billion for fiscal 2Q17, a 53% surge on a YoY basis and more than what Wall Street anticipated. However, despite robust growth in mobile ad sales, the company’s overall revenue growth has been slowing down, and is now the slowest since 2015, as we explained in part one of this series.

Mobile ads now provide 87% of the company’s total ad revenue compared to 85% in fiscal 1Q17 and 84% in fiscal 2Q16. Facebook’s total ad revenue in 2Q17 stood at $9.2 billion. Facebook has increasingly been the preferred venue for online advertisers.

Why Facebook’s Mobile Ad Revenues Are Critical

Facebook’s ad revenues growing much faster than Google’s

Facebook’s fiscal 2Q17 total ad revenues soared by 47% to $9.2 billion. Meanwhile, Alphabet (GOOG) (GOOGL) clocked ad revenues of $22.7 billion in fiscal 2Q17, which is a 15.6% increase. Facebook’s ad revenues continue to grow at a much faster rate than Google’s, albeit with a much smaller base.

Meanwhile, according to Mark Zuckerberg, video could become the largest driver of the company’s business over the next few years. The company said it’s likely to add short original content programming soon. This area is where Facebook hopes to get returning users like Google’s YouTube. However, competition is already stiff with the likes of Netflix (NFLX), Amazon (AMZN), and Hulu fighting it out.