After a rocky year and a tough market for IPOs, Facebook
) shares rose more than 20 percent Wednesday morning. Investors
were particularly impressed with the company's 32 percent
increase in revenue and its 61 percent year-over-year increase in
mobile MAUs (monthly active users), as well as its ability to
profit from mobile devices.
"As proud as I am that a billion people use Facebook each
month, I'm also really happy that over 600 million people now
share and connect on Facebook every month using mobile devices,"
Mark Zuckerberg, Facebook founder and CEO, said in a
. "People who use our mobile products are more engaged, and we
believe we can increase engagement even further as we continue to
introduce new products and improve our platform. At the same
time, we are deeply integrating monetization into our product
teams in order to build a stronger, more valuable company."
Since its initial public offering in May, Facebook shares have
headed south. The peak share price of $38.23 (achieved on the
first day of trading) was quickly diminished by fearful investors
who were not convinced that the social networking giant could
monetize its hundreds of millions (now billion) users. Facebook
is finally beginning to show that it
know how to turn a profit.
That said, not all is well in the land of social
"Overall, gaming on Facebook isn't doing as well as I'd like,"
Zuckerberg announced during the company's
Q3 earnings call
. "But the reality is that there are actually two different
stories playing out here. On the one hand our payments revenue
from Zynga decreased by 20 per cent this quarter compared to last
year. But the interesting thing is that the rest of the games
ecosystem has actually been growing.
"Our monthly payments revenue from the rest of the ecosystem
increased 40 per cent over the past year since payments has been
adopted. This evolution is pretty encouraging."
As "encouraged" as Zuckerberg may be, that does not change the
fact that the company's biggest gaming partner, Zynga (NYSE:
), is struggling to stay afloat. In an attempt to cut costs, the
FarmVille maker has
closed one studio and laid off more than 100
Despite Zynga's problems and its inability to provide its
, the company is still the worldwide leader of the social gaming
market. But its lead is beginning to shrink. On October 1, Zynga
340 million monthly active users
. As of October 24,
rankings show that Zynga's MAU has declined to 316 million
Right now ChefVille has 28 million users, while Zynga Slingo
is at 23 million. These are two of the company's most popular
games, yet three weeks ago, they had more than 48 million users
Despite the declines, Zynga is not likely to shut more doors
anytime soon. If that day comes, Facebook will be forced to fill
a significant void. Now that the company has shown that it can
one billion people
, Facebook might want to re-evaluate its social gaming
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.