6 Things We Learned From Facebook's Earnings Report

Mobile makes money, Zynga isn't a very good friend and Sam's Chowder House loves Facebook.

1. Mobile, Mobile, Mobile

Noah Berger, File / AP

Facebook released its third quarter earnings today and the m-word — mobile — was all over it. During the call to investors and nosy press, Mark Zuckerberg emphasized that Facebook is no loser on the cellphone or tablet: He wanted to "dispel the myth that Facebook can't make money on mobile" with numbers. Like the fact that 14% of Facebook's total ad revenue comes from mobile. Also, there were 604 million "mobile active users" through end of September, an increase of 61% since last year.

BTW, Facebook phone hopefuls, Zuck noted that the company doesn't see itself as a competitor for mobile platforms like Apple's iOS or Google's Android: "We are primarily an information-sharing platform, not an environment for running apps." In every possible way, Facebook sees its future on your phone, not your desktop.

2. Expect More Ads In Your Newsfeed


In keeping with the theme of "mobile first," Facebook trumpeted the Newsfeed as "natural ad format for mobile." This is why it's so hot on the "promoted post" option — a cheap way to get people to start paying for posts that appear in that river of daily updates. Finding ways to monetize the Newsfeed is going to be key moving forward for Facebook, as, in their own words, mobile "ads are more like TV — integrated into experience more than on the side." Expect to squint more frequently at your (tiny) screen, figuring out who is paying for you to see what update.

3. Zynga and Facebook: From "In a Relationship" to "It's Complicated"

Paul Sakuma / AP

One clear loser from the earnings call: Zynga. "Gaming isn't doing as well as I'd like," Zuckerberg admitted during the call, before dropping a bomb on Zynga. Payment from Zynga has declined 20% since the third quarter last year while "the rest of the ecosystem has been growing." This only adds to Zynga's no-good-terrible-very-bad-day: after being spanked for laying off 5 percent of its workforce while the tech world was watching Apple's product unveiling, the stock sunk by 5% (although rebounded a bit in after-hours trading).

4. Instagram Wins

Instagram: @http://help.instagram.com/customer/portal/articles/95719

Since Facebook bought Instagram, the number of users has gone from 27 million to 100 million. Earnings call fun fact: people spend more time on Instagram than Twitter. According to Instagram/Facebook.

5. Strength in Numbers

Valentin Flauraud / Reuters

Once again, when it came time to brag, it was the giant reach of Facebook that took center stage. After recently announcing that the monthly user count hit one billion, COO Sheryl Sandberg pointed out that the site's daily reach is more than three times this year's Superbowl — "and that happens every day." As Sandberg put it, "We are a third thing. We are not TV, we are not search, we are social advertising." It takes an army of users to make anything social.

6. Local Businesses Like Free Products

It is still difficult to crack that estimated $20 billion nut: small, local businesses. Sandberg said that Facebook has millions of local businesses using free services, like making Facebook pages, but it's hard to convince them to start paying. (Which is where Facebook's promoted posts come in.) But one Bay Area restaurant has apparently had good results with ads — Sam's Chowder House, in Half Moon Bay. The Facebook execs called out Sam's in particular, saying that Facebook ads had been responsible for a 19% increase in monthly diners. Go Sam's!