Q4 2013 Earnings Call Transcript

Transcript Call Date 01/29/2014

Now, moving onto our business, last quarter I talked about our efforts to grow our business through improving the quality of our ads rather than just increasing the quantity. Our goal is to reach a point where the ads are as relevant and timely as the content your friends share with you. To do this, we've put a lot of effort into measuring people's sentiment around our ads and seeing how people engage with them.

We do some of the broadest surveys in the world. We survey more than 35,000 people every day to see how we're doing, and we use the results to drive our product development. Our approach is working. In the second half of 2013, we saw an improvement in sentiment about ads on mobile, even as volume grew during that period. We also saw sentiment on desktop remain stable.

Interestingly, even as the volume of News Feed ads has grown, click through rates have also remained stable. We're very pleased with these results, and they suggest our strategy of improving quality is working. Our plan is to continue focusing on improving quality, since we think this is the best way for us to improve the experience for people on Facebook, returns for advertisers and our own revenue, as well as achieving our long-term goal of providing ads, which are as relevant as organic content.

So that's my update on where we're focusing our efforts in the context of our longer term goals. It has been a strong quarter and a great year for Facebook.

Next week Facebook turns 10 years old. It has been an amazing journey so far, for me personally and for all of us as a Company. But what's ahead of us is even more exciting. Many of the successes of the past 10 years have simply been steps on the path to achieving our long term vision of connecting everyone and improving the world through sharing. Over the coming months and years, you'll see us continue focusing on many of the same themes but now with greater scale, ambition and resources.

Finally, I just want to thank everyone who works at Facebook for a great year in 2013 and over the past 10 years. What we've achieved together has been a result of all of your hard work, and I'm grateful that so many talented people are a part of our team.

Thank you, and now here's Sheryl.

Sheryl Sandberg - COO: Thanks, Mark and, hi, everyone. I am really excited to report earnings this quarter and proud of the teams at Facebook who delivered these results. We ended 2013 with a terrific fourth quarter, continuing the strong momentum we saw throughout the year.

Our total revenue grew 63% year-over-year, led by 76% growth in advertising revenue. Approximately 53% of our ad revenue came from mobile. This is not only the first time we crossed the 50% threshold in mobile, but it's also our first $1 billion mobile quarter. In fact, our Q4 mobile ad revenue of $1.25 billion was nearly as large as our total ad revenue in Q4 of last year.

This growth continues to be very broad based. The combination Mark spoke about of our growth in users and engagement, the effectiveness of our ads in News Feed, work together to provide marketers with a powerful way to reach people. This impact is evident in our results. This quarter we saw healthy increases in every region around the world, and positive momentum in all four marketer segments.

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