Profits fall as mobile users exceed web users for first time

Facebook numbers beat the Street with a surge in fourth-quarter advertising although net income was squeezed by special items like stock-related compensation year-on-year when it was still a private company.

The world’s largest social network, which boasted 1.06 billion monthly active users as of Dec. 31, said profit fell to $64 million from $302 million. But, to the likely envy of traditional media, revenue surged 40% to $1.6 billion. Some 84%, or $1.3 billion of that, was advertising, which rose 40% year-over-year. Mobile advertising, a key meausure as that market comes to define the new user, repped 23% of the total for the quarter, up from 14% the year before.

Daily mobile users exceeded daily web users in the fourth quarter for the first time.

Payments and fees, at $256 million, were flat.

Facebook said mobile monthly active users jumped 57% to 680 million by year end from the year before. But the growth had slowed slightly from the second and third quarters.

“In 2012, we connected over a billion people and became a mobile company,” said Mark Zuckerberg, Facebook founder and CEO. “We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company.”

During the quarter, Facebook launched Graph Search Beta, a structured search tool that lets users find people, places, photos and other content that has been shared on Facebook. It also launched Facebook for Android 2.0, completely rebuilt, to deliver improved stability and faster performance, and opened Facebook Messenger to anyone with a telephone number.

Facebook went public under an international microscope in May in what was generally agreed to be a fiasco, with an overly aggressive initial price further complicated by trading glitches. It closed up at 1.46% at $31.24 Wednesday, still below its $38 offer price. It was down just over 2% in after-hours trading.

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