Social Networking, Mobile | featured news

Yes, this again. Facebook on Thursday sent out invitations for a press event that promised to show off the company’s “new home on Android,” which naturally led to fresh speculation about the company’s intention to produce its own Facebook-centric smartphone.

Facebook Inc doubled its mobile advertising from the previous quarter as the world's No. 1 social network expanded its business aggressively onto handheld devices.

Facebook has faced a few controversies in the past few months, including controversies over privacy policies on its own site and on its photo-sharing site, Instagram. Still, the company has bolstered investor confidence with a series of moves that seem to lay the groundwork for Facebook to make more advertising dollars, particularly in the all-important mobile space.

Instagram, the popular photo-sharing service that Facebook bought this year, is the target of a storm of outrage on Twitter and other sites after a change in its user agreement hinted that it might use shared photos in ads.

Facebook lost $59 million in the third quarter, but the newly publicly traded social networking site saw its shares soar on Wall Street early Wednesday. Facebook shares gained $4.35, or 22%, to $23.85 in early trading, after the company reported gains from mobile advertising.

India is becoming a critical testing ground for Facebook as it strives to capitalize on growth in emerging markets and better target mobile-phone users—two increasingly pressing goals for the social-networking firm.

Facebook Inc CEO Mark Zuckerberg soothed investors in his first major public appearance since the No. 1 social network's rocky May IPO, breathing life into its struggling shares after hinting at new growth areas from mobile to search.

Kevin Systrom's smartest move was to sell Instagram to Facebook early, before having to deliver even an iota of revenue. My prediction is that we’ll look back on Facebook's acquisition of Instagram as a bust—much in the same way we now view News Corp.’s purchase of Myspace, AOL’s purchase of Bebo, and Excite@Home’s purchase of Blue Mountain Arts.

...There’s also the issue that these mobile ads are completely new. Users don’t know any better and happen to click on them. However, over time (and probably pretty quickly), they will learn to avoid these new ads. When banner ads began in the 1990s, CTRs over 5% were common. They are currently 0.2 – 0.3%.

On most days, Twitter is now generating the majority of its revenue from ads shown to its users on mobile gadgets, rather than from ads on Twitter.com, company executives said. One key reason: People who see a Twitter ad on their phones are more likely to click or interact with it in some way, which is how Twitter gets paid for advertisements.