NEW YORK,
Facebook
shares jumped to record highs Thursday, buoyed by news of
stronger-than-expected profits and sizzling gains in mobile advertising
revenue.
The gains came as Facebook introduced a new
mobile app aimed at becoming a social newspaper of sorts for the members
of the world's biggest social network.
The stock ended
up 14.1 percent at an all-time closing high of $61.08 a day after
Facebook reported that profit in the fourth quarter jumped eightfold
from a year earlier to $523 million, boosting its net income for the
year to $1.5 billion.
"Facebook's ascendancy and
execution in 2013 has been near-flawless," said Deutsche Bank analyst
Ross Sandler in a note to clients.
Mark Mahaney at RBC Capital Markets said he was "more positive" on Facebook after the strong quarterly report.
MOBILE IS KING
"The most important Internet trend by far is MOBILE, and Facebook has become a MOBILE company," he wrote in a research note.
Scott
Devitt at Morgan Stanley said Facebook's results "show no signs of
slowing mobile momentum" and noted that the company has managed to
skilfully get more ad revenues.
The figures suggest
that "Facebook improves its ability to make ads more relevant and less
intrusive to users," he said in a research note.
In
another sign of its focus on mobile, Facebook unveiled its new app
called "Paper," an online newspaper for viewing and sharing articles and
other content from a smartphone.
"Paper makes
storytelling more beautiful with an immersive design and fullscreen,
distraction-free layouts," Facebook said in a blog post announcing the
new service.
"We've also made it easier to craft and share beautiful stories of your own."
The app, the first product from Facebook Creative Labs, will be available February 3 for iPhone users.
Paper
presents stories and themed sections to allow people to follow topics
ranging from news headlines to food to sports and science.
It has a tiled design that allows users to customize the display alongside a personal Facebook feed.
"Each section includes a rich mix of content from emerging voices and well-known publications," the blog post said.
The
partners in Paper were not named, but a video released by Facebook
showed a user scrolling articles and content from The New York Times,
Time magazine, USA Today, The Huffington Post and others.
"Storytelling and sharing have been reimagined in Paper to show stories at their best," Facebook said.
The
app will allow for full-screen viewing of videos and will "make it easy
to spot articles from trusted publishers and decide what to read or
watch," it added.
Facebook said users could tilt their
phones to scroll through high-resolution panoramic photos and to zoom
into details like faces.
SURGING REVENUES
Reports
in recent weeks said Facebook was hiring editors or "curators" to
complement its algorithmic method of delivering content to its users
The company's latest earnings report showed revenue in the past quarter rose to $2.58 billion, and $7.87 billion for the year.
Facebook
said the number of monthly active users rose 16 percent from a year ago
to 1.23 billion, with 945 million using mobile devices.
Advertising
revenue surged to $2.34 billion in the quarter, up 76 percent over the
past year. Mobile advertising revenue represented some 53 percent of
that figure, an increase from 23 percent in the fourth quarter of 2012.
These gains appear to have paid off handsomely for Facebook and for its founder and chief executive Mark Zuckerberg.
The market intelligence firm Wealth-X said Zuckerberg's net worth has risen to $29.7 billion with the jump in Facebook shares.
"At 29 years old, Zuckerberg's current fortune equates to more than $1 billion for every year he has lived," Wealth-X said.
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GOOGLE'S PROFITS CLIMB ON AD REVENUE
Google on Thursday reported that profit in the closing quarter of last year climbed to $3.38 billion on rising ad revenue.
"We ended 2013 with another great quarter of momentum and growth," Google chief Larry Page said in the earnings release.
Google also declared it would pay a dividend in the form of Class C stock.
Google
shares rose slightly in after-market trades to $1,141.60, having closed
the day up 2.57 percent to $1,135.39 on word of its deal to sell
smartphone maker Motorola Mobility to China-based computer titan Lenovo.
WIN-WIN
Motorola
was seen by analysts as a drag on Google profit and an irritant in its
relationships with partners who crank out smartphones or tablets powered
by the Internet giant's Android software.
Google has
agreed to sell Motorola to Lenovo for $2.91 billion, after a lackluster
two-year effort to turn around the smartphone maker it bought for $12.5
billion.
The deal ends Google's run as a handset maker after it biggest-ever takeover, which was announced in 2011 and finalized in 2012.
It
also provides Lenovo footholds in smartphone and tablet markets where
it is eager to gain traction while acting as a peace offering to Samsung
and other partners that make devices powered by Google-backed Android
software.
"It is win-win," said analyst Tim Bajarin of
Creative Strategies in Silicon Valley. "Google keeps the patents and the
research group, and they keep partners off their back, while Lenovo
gets what they need to get into the US smartphone market."
Even
under Google, Motorola failed to gain traction in a rapidly evolving
smartphone market now dominated by South Korea's Samsung and US-based
Apple.
Google continues to have hardware plans that
include Nest smart home thermostats, Internet connected eyewear called
"Glass," and making Android smartphones and tablets with partners.
"We
made great progress across a wide range of product improvements and
business goals," Page said of the final quarter of last year.
"I'm also very excited about improving people's lives even more with continued hard work on our user experiences."
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