SAN FRANCISCO -- With a little help from its billion or so friends, Facebook seems to have cracked the code on how to turn the world's largest social network into a moneymaking machine.
The giant social network which began as a project in Mark Zuckerberg's dorm room keeps growing steadily and profitably by peddling ads to its users all over the planet, whether they log in from desktops or increasingly from mobile devices.
In the process, it has won over once skeptical investors by releasing a string of impressive quarterly reports, the latest on Wednesday. Facebook knocked its fourth quarter out of the park, besting Wall Street expectations yet again.
Shares shot up 10% to $58.90 in after-hours trading.
Facebook said total revenue jumped 63% to $2.59 billion. Earnings excluding certain items were 31 cents a share, up from 17 cents a year earlier. Analysts had expected revenue of $2.33 billion and earnings of 27 cents a share.
The driver? Mobile advertising. Once the company's Achilles' heel, it now accounts for 53% of total advertising revenue, up from 49% in the third quarter.
When the company went public in May 2012, it was not making any money from mobile ads. But in July Facebook reported a second-quarter surge in mobile ads.
"Facebook reported very strong fourth quarter results, comfortably exceeding consensus and our estimates on both the top and bottom lines," said Cantor Fitzgerald's Youssef Squali. "The results showed a material acceleration in year-over-year growth in ad revenues, reflecting healthy demand for social-based advertising, and a sequential improvement of mobile. ... This was an all around impressive performance."