Apparently, a several-billion-dollar valuation just isn’t enough for Facebook—reports indicate that the social networking giant intends to launch mobile ads in March to drum up more interest and value before stock sales begin in May.
According to Facebook’s IPO filing last Wednesday, the company isn’t generating any “meaningful revenue” from its 425 million mobile users, which is nearly half of the social network’s total customer base. Facebook attributes the recent uptick in mobile visitors to an increase in global smartphone adoption as well as improvements in the company’s own mobile applications.
Reportedly, the initial round of mobile ads will be sponsored stories appearing in the News Feed. Sponsored stories debuted on the desktop version of Facebook in 2011, and appear on the page when a user’s friend performs action such as liking a brand’s page, checking in at a restaurant, or mentioning a retail store. Facebook has not officially confirmed that this is happening, but they did say in their IPO that “[they] may have potential future monetization opportunities…such as the inclusion of sponsored stories in users’ mobile News Feeds,” so it seems likely that this is happening.
What remains to be seen, of course, is how users will react to advertisements on devices with limited screen space and less RAM than their desktop counterparts. Facebook users are known for loudly protesting updates to the website’s interface, and the inclusion of sponsored stories or other ads on the News Feed would definitely constitute a major change.
Other social networks have attempted to extract revenue from mobile users in the past; Twitter famously introduced a persistent advertisement bar called the “Quick Bar” to its mobile version in March 2011 in a move that was met with so many complaints that it was removed shortly after.
Delivering ads to mobile users is a risky move on Facebook’s part—it may alienate mobile users, but it could also bring in significant additional revenue to the company and convince more investors to purchase stock when sales open in May of this year.
