Facebook Inc's mobile advertising success offers a ray of hope for Internet companies trying to make money within the confines of the smartphone's small screen.
The social network's 75% surge in mobile ad revenue in a span of just three months not only doused skepticism on Wall Street and Madison Avenue about Facebook's business prospects, some say it could serve as a how-to guide for other Web companies navigating a world where the phone and tablet have fast become the screens of choice.
"You're going to see a lot of companies transitioning and trying to emulate this model because it's working so well. That's why last night was a true watershed moment," said Ben Schachter, an analyst at Macquarie Research.
Internet company executives have long been concerned that mobile advertising is inherently less lucrative than traditional desktop PC advertising, due to the smartphone's limited screen size and possible consumer resistance to a flood of ads on their devices.
Companies from Google Inc and Yahoo! Inc to upstarts such as Snapchat are searching for the right formula to monetise mobile services. While Google has developed a mobile ad business generating an estimated US$10bil (RM32.19bil) a year in revenue, it remains much smaller and less lucrative than Google's desktop search advertising. Analysts expect Google to generate US$60bil (RM193bil) in annual revenue this year.
