MENLO PARK -- Nearly 10 years after Mark Zuckerberg used a laptop computer to launched a new social network from his Harvard dorm, Facebook issued a blockbuster earnings report Wednesday that confirmed the company's transition to a business based on smartphones and tablets.

For the first time, Facebook said it drew more than half its ad revenue from mobile devices, which fueled record sales and profit for the final quarter of 2013. Well over half its 757 million daily visitors used Facebook on mobile devices.

"2013 was the year we turned our business into a mobile business," Zuckerberg told analysts on a conference call, after announcing that fourth-quarter profit soared more than 700 percent from a year earlier. Revenue rose 63 percent to $2.58 billion for the quarter.

Facebook's results were better than Wall Street expected, and its revenue has grown at an increasing pace for each of the past three quarters. "It seems like they're hitting on all cylinders," said analyst Arvind Bhatia, who tracks Internet stocks for Sterne Agee.

The company released no new information about teenage users, a source of concern for some analysts who worry teens are abandoning Facebook for newer online services like Snapchat.

But Facebook reported $523 million in profit for the quarter, up from $64 million a year earlier, when the company took sizable charges for employee stock grants. Mobile ad revenue rose to $1.24 billion, or 53 percent of the company's advertising sales.


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Mobile sales have grown steadily since Zuckerberg moved in 2012 to redesign how Facebook looks on smartphones, followed by a push to create new ad formats for the smaller screens of mobile devices.

As it approaches the 10-year anniversary of its launch on Feb. 4, 2004, Facebook is now testing other new formats, including video commercials in its main news feed and ads on Instagram, the Facebook-owned photo-sharing service.

Mobile ads helped Facebook pass Yahoo last year to become the No. 2 seller of online advertising in the United States, after Google, according to research firm eMarketer. Yahoo said this week that it has minimal mobile ad revenue.

But Facebook still faces threats from newer rivals. Researchers at Adobe say social networking sites such as Twitter, Pinterest and the Yahoo-owned Tumblr are seeing faster growth in the number of users who follow links on those sites to those of online retailers.

"It used to be that Facebook was the only game in town," said Adobe's Tamara Gaffney, but that's no longer the case.

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