Facebook Inc (NASDAQ:FB)’s earnings are coming out on Wednesday, and how the company manages the transition to mobile continues to be the most important issue on analysts’ minds. Expanding the US and European user base can only continue for so long, and emerging market users don’t translate to advertising dollars quite as readily, so earnings growth will hinge on Facebook dominating the mobile ad space.

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Jeff Reeves at MarketWatch came out as a Facebook Inc (NASDAQ:FB) bear today saying that “even if Facebook manages to post decent numbers this week when it reports earnings, the stock can’t keep this run up for much longer — and investors who are sitting on big profits may be wise to sell now rather than risk steep declines.” He points out that the last two companies to see their share prices rise as quickly as Facebook’s has this year were Oracle Corporation (NYSE:ORCL) and Yahoo! Inc. (NASDAQ:YHOO) at the height of the dot-com bubble, and that both stocks are more than 60% down from their glory days.

Facebook has a stronger mobile presence than anyone

Expectations are certainly high. Reuters reports that analysts are publicly predicting a five-fold increase in mobile revenue and privately hoping for even more, and that’s the real problem that Facebook investors are facing right now. The company has had a great year by any reasonable measure. Even if its user base remains flat, it is still enormous, and it has established itself as a serious competitor to search engine advertising. Facebook Inc (NASDAQ:FB) has a stronger mobile presence than anyone imagined it would this time last year.

But the stock’s price has always been driven by sentiment more than fundamentals. To some extent this is true for all tech stocks, as Amazon.com, Inc. (NASDAQ:AMZN) has demonstrated by losing money to build market share time and again. Investors know that tech companies work differently, but that doesn’t mean they know how the companies work. When sentiment goes too far one way you get the tech bubble, too far the other way and people wonder if one of the internet’s largest companies will simply fade away.

Facebook’s long-term prospects look good

The truth is that Facebook Inc (NASDAQ:FB)’s long-term prospects look good, the only trick is not to get burnt by the market’s IT mood swings.