Facebook investors react ... on TwitterJanuary 30, 2013: 6:50 PM ET
Facebook beat fourth-quarter earnings and revenue estimates, and improved mobile ad sales, but investors weren't all that impressed.
Facebook (FB) stock tanked 10% within minutes in after-hours trading following the earnings release. But the stock nearly fully recovered before edging lower again as CEO Mark Zuckerberg, CFO David Ebersman and COO Sheryl Sandberg answered questions from analysts on a conference call. Shares were down 4% at the conclusion of the call, trading just below $30 a piece. Facebook finished the day's regular trading up almost 1.5% to $31.24.
The results and the stock reaction lit up that other big social networking site: Twitter.
Revenue from mobile advertising represented about 23% of total ad revenue during the fourth quarter, the company said. That's an improvement from 14% in the third quarter. Prior to that, Facebook had practically no mobile revenue.
Though mobile advertising revenue increased, the growth of mobile users slowed. During the fourth quarter, monthly active users of Facebook's mobile app rose by 57%, down from a 61% growth rate in the third quarter and 67% in the second quarter.
Still, Zuckerberg cemented the social network's direction, noting that "there is no argument today. Facebook is a mobile company." And he thinks that's a really good thing.
But some users quipped that Facebook's ad strategy could impact the overall user experience of the social network.
While Facebook didn't provide formal guidance for the year, Ebersman warned that the company's expenses will rise throughout the year as it expands its workforce.
Ebersman also noted that Instagram, which Facebook purchased last year for $1 billion, is continuing to grow rapidly.
Zuckerberg was also optimistic about the site's newer features, including Gifts and Graph Search, but doesn't expect them to be big money makers right away.
Though Zuckerberg and team continued to stress the the company has improved and remains focused on its mobile strategy, Facebook shares declined 4% Wednesday evening.
But some investors are willing to sleep on it and wait to see how the stock performs Thursday.