Facebook Inc (NASDAQ:FB) is expected to have a ‘Brighter Outlook’ according to a research report released from Evercore Partners Inc. (NYSE:EVR). As per the data provided by COMSCORE, Inc. (NASDAQ:SCOR), the social networking giant will experience a strong increase in mobile ad coverage in addition to better than expected mobile traffic data. On the basis of the data from comScore, Evercore partners believe that the company has the potential to beat its prior estimates. Facebook Inc (NASDAQ:FB) now represents 20 percent of all of the mobile traffic time spent (both app and browser) in the United States according to comScore, with ad coverage within the user experience doubling versus the prior quarter.
The report increased its fourth quarter revenue estimates by 4 percent to $1.60 billion, basing it on a 50 percent rise in its mobile ad estimate to $322 million. Such a rise in mobile ad revenues is a 112% increase over the third quarter, which now stands at 24 percent of total ad revenues against just 14 percent in the previous quarter. For 2013, the report increased its revenue estimates by 6.6 percent to 6.95 billion. Total amount of user time spent on Facebook mobile continues to climb on an absolute basis, up to 95 million minutes from 78 million, or 7 percent growth on a compounded monthly basis compared to 0.5 percent for the total internet.
The report additionally views a potential opportunity in the form of ad network rollout and higher CPM ad formats for the 2013 year. Facebook Inc (NASDAQ:FB)’s is likely to benefit from its new “Gifts” launch, and the report “sees it contributing as much as 5% to the company’s bottom line in 2013 (pro forma)”. The COMSCORE, Inc. (NASDAQ:SCOR) data shows a 25 percent decline in desktop time spent in the U.S., however the report believes that comScore “exclusively relying on just panel as opposed to the panel and site tagging (which FB prohibits) and comScore’s omission of ages 12-17 on mobile, which creates inconsistency with desktop where that age group is tracked”.
November was the first month where time spent on mobile surpassed desktop and mobile, consequentially revenue is expected to double quarterly to 24 percent of the total ad revenues. With such backdrop, the report believes that the social network is “well on its way to successfully navigating its mobile transition”. However it remains to be seen as to what effect smaller mobile screens coupled with higher levels of mobile ad saturation will have on the quality of the total user experience. “Our Equal-Weight rating reflects a degree of caution in this regard in addition to awaiting more tangible signs of traction within its other initiatives (e.g., ad net., video ad formats, Gifts)”says the report.
