Facebook Inc (NASDAQ:FB) transformed itself into a strong revenue generating machine in 2013 after a botched IPO in 2012. The social networking giant’s stock surged more than 110% last year. Facebook Inc (NASDAQ:FB) strengthened its position in mobile advertising, generating more than $900 million from mobile ads in Q3 alone.

Facebook Revenue

The stock is trading near an all-time high. So, investors must consider the upside potential before pouring their money into Facebook Inc (NASDAQ:FB). The online advertising market is fiercely competitive, with Google Inc (NASDAQ:GOOG), Twitter Inc (NYSE:TWTR) and Yahoo! Inc. (NASDAQ:YHOO) each making serious efforts to grab a bigger slice of online ad spending.

Facebook still going strong on mobile

Facebook Inc (NASDAQ:FB) still has a lot of growth potential despite competition, thanks to its unique positioning. According to research firm eMarketer, the Menlo Park-based company makes up only 16% of global mobile ad revenue, compared to a staggering 52% for Google Inc (NASDAQ:GOOG). In Q3, the number of monthly active users on Facebook Inc (NASDAQ:FB) increased 18% over the same period a year ago. Deutsche Bank analysts expect the social networking giant’s Q4 revenues to jump 67%.

More than 60% of the global population is still not connected to Internet. As more users gain access to Internet, Facebook Inc (NASDAQ:FB)’s potential user base is also likely to increase. That’s why Mark Zuckerberg is promoting technologies through his Internet.org initiative by trying new ways to reduce the Internet access costs and establishing strategic partnerships with local operators.

Facebook’s three other revenue generating tools

On revenue generating front, the company is currently testing video ads into the users’ news feed. Analysts estimate that Facebook Inc (NASDAQ:FB) can easily generate more than $1.1 billion in video ad revenue in 2015. Google Inc (NASDAQ:GOOG) is estimated to have generated more than $5 billion from video ads through YouTube. It proves that video advertising has immense growth potential. Facebook Inc (NASDAQ:FB) is also planning to launch a digital newspaper for the mobile platform. It will aggregate content from a number of sources. The digital newspaper may emerge as yet another source of potential revenue.

Gaming fees is another area of potential growth. Mobile users are more likely to play games on the social network compared to their desktop-using counterparts. As the number of mobile users grows, Facebook Inc (NASDAQ:FB) can expect a growth in its revenues. The company takes a 30% cut from game developers’ fee. Initially, it wasn’t charging anything to game developers. But once Facebook Inc (NASDAQ:FB) realized its unique social positioning and pricing powers, it began to take a cut.

We know that Facebook Inc (NASDAQ:FB) has acquired more than 40 startups since its launch. It can generate additional revenue from any of its acquisitions, just like Yahoo! Inc. (NASDAQ:YHOO) is reaping the benefits of its investments in Alibaba and Yahoo! Japan.

Facebook Inc (NASDAQ:FB) shares gained 0.52% to $58.01 in pre-market trading Wednesday.