MENLO PARK -- For a time on Thursday, a company based on sharing "likes" and photos was worth more than storied computer pioneer IBM.

A surge in mobile ad sales sent Facebook's shares rocketing to new heights Thursday, driving its stock market value temporarily higher than IBM's and lifting the social network to the rank of third-most-valuable company in Silicon Valley, behind Apple and Google.

The one-day stock surge also added about $1.6 billion to the personal wealth of founder and CEO Mark Zuckerberg, whose Facebook holdings are now worth more than $33 billion.

By most measures, Facebook is dwarfed by IBM: With about 7,000 employees, 10-year-old Facebook is on track to garner $12 billion in sales this year. The 103-year-old IBM has more than 400,000 workers and sold almost $100 billion of computer hardware and software in 2013.

But a blockbuster second-quarter earnings report sent Facebook's stock price up more than 5 percent Thursday. Excited over the company's rapid growth -- and convinced of its potential to grow more -- investors drove Facebook shares to a new high of $76.74, before they settled at a closing price of $74.98.

That meant the combined value of all Facebook stock was briefly higher than IBM, although Facebook's value ended the day at $192 billion and IBM ended above $197 billion. That's still higher than Oracle's $180 billion, which was the valley's third-largest company by stock market value until Facebook passed it Wednesday.


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Facebook shares are now selling for almost twice the $38 price the social network set for its initial public offering price two years ago, and four times the low of $18.03 that Facebook hit in the dog days of August 2012, after that IPO turned into a short-term disaster.

"That's a pretty amazing turnaround over just two years," said Scott Kessler, a tech stocks analyst at S&P Capital IQ.

Analysts credit Zuckerberg with building a mobile advertising business that didn't exist at the company two years ago. Nearly two-thirds of Facebook's revenue now comes from showing digital ads on users' smartphones and tablets. That's helped Facebook beat Wall Street revenue estimates for nine consecutive quarters.

"The bottom line is that (Facebook) significantly exceeded very high expectations," analyst Ben Schachter of Macquarie Securities told investors in an email after the company announced that second-quarter sales grew 61 percent and profit climbed 137 percent.

Wall Street is also upbeat about Facebook's ability to tap new revenue. That optimism was undimmed even after Zuckerberg warned analysts Wednesday that he plans to invest heavily in new products and technology, including mobile messaging and virtual reality, which may not pay off for years.

While it will be difficult for Facebook to keep growing as rapidly as it has in recent quarters, analysts expect the company can still increase its revenue by selling more ads on Instagram and video commercials in Facebook's mobile news feed.

"We expect Facebook to continue to ride the mobile wave," analyst Youssef Squali of Cantor Fitzgerald, said in a note to investors.

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