MENLO PARK -- Advertising on smartphones and tablets made up 41 percent of Facebook's second-quarter ad sales, the company said Wednesday, as the world's largest social network follows through on its promise to build a mobile business that did not even exist a year ago.
"Clearly advertisers are jumping on the mobile bandwagon with Facebook," said Colin Sebastian, senior research analyst at Baird Research. "That means the ads are generally working, at least working better than the desktop ads. For now, the lines are pointing in the right direction."
In the first quarter of the year, mobile advertising revenue made up only 30 percent of Facebook's ad sales. But the company's push to follow consumers who are turning away from personal computers to smartphones and tablets apparently is paying off.
"We're really starting to see the upside of some of the investments we've been making," Facebook CEO Mark Zuckerberg told analysts Wednesday.
Shares of Facebook closed at $26.51 Wednesday but shot up to nearly $31 in after-hours trading.
Wall Street analysts were expecting Facebook to report earnings of 9 cents a share, or 14 cents a share after adjusting for one-time charges, on revenue of $1.62 billion, according to Thomson Reuters.
Instead, Facebook reported earnings of 13 cents a share, or 19 cents a share after adjusting for one-time charges, on revenue of $1.81 billion. A year ago, Facebook saw revenue of $1.18 billion.
Facebook's monthly active users on mobile devices jumped 51 percent -- to 819 million -- in the second quarter compared with the year before. At the same time, its total monthly active users jumped 21 percent, to 1.15 billion.
A year ago, most Facebook ads appeared in a separate column to the right of the main News Feed on desktops, and the company didn't even sell advertising on its mobile platform.
Now new advertising programs, especially a move to place ads within the main News Feed, have proved appealing to advertisers -- even if some Facebook users complain about seeing too many commercials. Facebook brought in $1.6 billion in total advertising revenue in the second quarter, with mobile advertising representing 41 percent.
During the quarter that ended June 30, Facebook announced several new products and advertising programs as it faced the twin challenges of keeping users engaged and persuading advertisers that Facebook is an effective platform for commercial messages.
One new Facebook product, the Home app for Android smartphones, debuted in April to a splash of interest that quickly subsided, as users complained that Home made it difficult to use other apps on their phones.
Facebook also has partnered with other companies on programs that deliver ads to individual users based on past purchases in retail stores, or to users who have also visited outside websites that may indicate they're interested in particular products.
Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.