TechCrunch
Facebook's Desktop Ad Revenue Grew Only $69M In Q2, Mobile Rev To Outpace Desktop By EOY 2013
Facebook stunned yesterday with its report that mobile advertising represented 41 percent of its total ad revenue in the second quarter of 2013. In the first quarter of 2013, it totaled a then-hailed 30 percent, bumping that key ratio by more than a third in just a fourth of a year. On a dollar basis, Facebook’s mobile advertising grew more than four times as much as its desktop-sourced advertising incomes in the most recent quarter.
However, looking backwards, last quarter’s mobile ad growth is less astounding when placed into context. From the third to fourth quarter of 2012, Facebook juiced its ad revenue as a percentage of total ad income by 9 percent. From the last quarter of 2012 to the first quarter of 2013, growth was 7 percent. Taking into account the 11 percent gain reported yesterday, Facebook has averaged 9 percent growth in its mobile ad revenue as a component of its larger ad top line for the past few quarters.
This allows us the ability to make basic predictions. Facebook yesterday noted on its earnings call that mobile advertising revenues will eventually outstrip desktop ad income. But when? Well, we can predict. If mobile advertising revenues continue at their average rate of the past few quarters, Facebook should earn precisely as much from desktop and mobile advertising platforms in the current quarter.
The math is simple: Facebook ended the most recent quarter with a 41/59 split between mobile and desktop ad income. If mobile revenues are growing by 9 percent quarterly — again, on average — 41 and 9 make 50, leaving the remaining 50 percent for desktop ad revenues.
Adding another 9 percent to Facebook’s mobile ad revenue as a percentage of its total ad income, and we could wrap the year where the second quarter finished, but in reverse, with mobile revenues comprising 59 percent of total ad income, and desktop just 41 percent.
This feels, prima facie, optimistic. Are we being too generous?
There is always a risk in any form of prediction, as future market dynamics are outside of our vision, and will always remain so. That said, we can take mild refuge in the fact that our average rate of mobile ad growth, again as a percentage of Facebook’s total advertising top line, is under the most recent quarter’s rise; this means that we are anticipating Facebook to under-perform its most recent quarter moving forward.
This gives us some breathing room in our predictions. Here’s the chart:
If mobile revenue is so strong, where does that leave desktop advertising incomes? Well, as it turns out, Facebook’s desktop advertising business is all but not growing. We can deduce this by subtracting the percentage of Facebook’s mobile ad revenue from its total advertising income, leaving us with its desktop-sourced figure. Let’s have some fun:
- Facebook’s total advertising revenue was $1.25 billion in the first quarter of 2013. Of that, 30 percent came from mobile. That means 70 percent came from desktop sources. Seventy percent of $1.25 billion is $875 million.
- Facebook’s total advertising revenue was $1.60 billion in the second quarter of 2013. Of that, 41 percent came from mobile. That means 59 percent came from desktop sources. Fifty-nine of $1.60 billion is $944 million.
- $944 million – $875 million = $69 million. That, assuming that Facebook has its numbers in place, is the delta between Q1 and Q2 for Facebook’s desktop advertising business.
That’s not much. Not only is Facebook sourcing a growing percentage of its revenue from mobile platforms, but its revenue growth is increasingly coming from a smartphone near you.
Let’s get to the bottom of the final number: In dollar figures, how much did Facebook’s mobile ad revenue grow from the first to second quarter? I’m glad you asked. Let’s find out:
- Facebook’s total advertising revenue was $1.25 billion in the first quarter of 2013. Of that, 30 percent came from mobile. Thirty percent of $1.25 billion is $375 million.
- Facebook’s total advertising revenue was $1.60 billion in the second quarter of 2013. Of that, 41 percent came from mobile. Forty-one percent of $1.60 billion is $656 million.
- $656 million – $375 million = $282 million.
So, Facebook’s mobile revenue grew by a quarter billion dollars in the second quarter. Not bad, given that as a percentage gain it works out to around 75 percent. And, perhaps more importantly, the $282 million figure is more than four times our previous $69 million sum. Therefore, mobile ad revenues on a dollar basis grew four times as fast as desktop advertising incomes in the most recent quarter.
Mobile-first, indeed.
Top Image Credit: Randy Lemoine
Canary Shatters Its Indiegogo Funding Goal For Its Smart, Dead-Simple Home Monitors
There are some 90 million homes in the U.S. without any security system whatsoever. Many of them are renters who don’t want to invest heavily in a place they don’t own, among hundreds of thousands of home owners who are simply priced out. There has never been a convenient, all-in-one system that could offer home security at an affordable rate, much less one you could pick up at the local Best Buy.
But that all changes with Canary, the latest crowd-funding sensation to hit Indiegogo. We caught up with NYC-based founder Adam Sager to discuss the project.
Canary is a little console, slightly smaller than the size of a paper towel roll, that’s packed with a host of sensors, a mic, and an HD camera.
For $200 down, this little guy will connect to the Wifi, sync with your phone, and constantly watch your home. I say watch, and not monitor, because Canary can only see as far as its sensors will allow, whereas most home security systems are wired in to monitor every crack and crevice of a home. Canary can only hear as far as the mic allows, or the camera sees, or the sensors can sense.
However, Sager believes that when you place the Canary in the central part of your home, near the front door perhaps or watching over the living room, that a real threat, like a burglar, will likely set off the Canary no matter where it enters from.
Plus, if you have a larger space or want added security, you can always link more than one Canary (up to four, Sager tells me).
Canary’s sensors include night vision, motion detection, temperature, air quality and humidity, along with a live feed to the HD camera at any given time. The phone will instantly alert the user whenever the home experiences a random change, like a temperature fluctuation or sudden movement.
But Canary is also smart enough to learn your home, sensing the difference between a burglary and a pet. It even understands when regularly scheduled events occur, like the arrival of a nanny or a dog walker at the same time each day, so that you don’t have a panic attack each time Rover needs to take a wizz.
Canary’s distribution model is different from any other home security system in that you will eventually be able to go pick one up at a local electronics store on the cheap. This has never really been available before, and the potential market is huge with 90 million homes completely unprotected and priced out of the alternatives.
Sager admits that margins on the hardware itself won’t be that high, but the plan is to offer value-added services like monitoring (delivered by a TBD third-party) for $10/month.
Canary has been on Indiegogo for four days, and has blown far beyond its $100k goal to be at $550k at the time of writing. It only took a few hours to reach $100k, according to Sager.
If you’d like to back the project, head on over to the Canary website or check out the Indiegogo campaign.
Photobucket Co-Founder Alex Welch Lets You Demand Photos From Friends With Lasso
Six years after selling Photobucket to News Corp. for $300 million, Alex Welch is launching a new way to share photos with your family and friends. Rather than making photos available on Instagram, Flickr, or any number of social networks according to privacy settings, Welch’s new venture, Lasso, lets friends ask for photos from each others’ camera roll.
Welch, who left Photobucket in 2009, decided about a year ago that he wanted to build a better camera roll for iOS with a few friends. He says they ultimately decided that the biggest thing missing from their camera rolls was their friends’ photos.
If you look at the pictures people share publicly as the tip of the iceberg of total photos they have, Welch argues that many people would be willing to share a lot more of those moments.
”You’re probably okay with sharing those photos with select people, but there isn’t an easy way to do that,” he tells me.
I’ve played around with the app a bit and I like it. You simply swipe a contact’s name to the right to send them photos, and to the left to request photos. When they’ve added new photos, a little subtle icon pops up next to their name.
The speed of sharing will be huge for Lasso. If I can ask a close friend what they’ve been up to in their new city or on vacation, and they can quickly shoot me a dozen photos, Lasso could start attracting a nice user base.
There are a ton of ways I currently share pictures with friends besides social networks–SMS, Snapchat, and email immediately come to mind. And yet, looking through my camera roll, I realize there are a ton of images that I haven’t shared that my friends might enjoy.
Photobucket has raised a $1.25M seed round from Welch, Jerry Murdock, Greylock Partners’ seed fund, and Trinity Ventures, which Welch says will mostly go towards more product development.
Lasso will expand beyond photos into soon, explaining that the concept can be applied to “any piece of digital content,” from videos to documents to apps your friends are using.
“What are things that you do or that you have every day that you’d be okay sharing with me if I specifically ask for it,” he says.
The iOS app is live now, and Welch says the Android app should be released in the next couple of weeks.
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