Facebook Inc (FB): What Did Instagram Teach Us?

Smartphone penetration has now reached 58% according to comScore, and 37% of all internet use is accessed from a mobile device. With that in mind, Facebook’s recent moves to beef up its attention to mobile details makes sense.

First, the company has been spending to take advantage of mobile opportunities. Mobile revenue comes from ads, and unfortunately, ads can’t just be “thrown onto” mobile Facebook accounts — it takes infrastructure and employees to do so. With these expenditures, Facebook has successfully grown its mobile revenue to 30% of its total revenue. At this pace, it is expected to snatch up 13% of the market, second only to Google, with plenty of room left to run.

Second, the company released the highly anticipated “Facebook Phone” that fully integrates the Facebook and smartphone experience. The jury is still out to whether this product was a worthy offering. Rumors have it that the phone may be nixed soon due to the Home app — the app that makes it a Facebook phone — only being downloaded 1 million times in the first month. But a failure during this first go-round could lead the company to launch an even better product down the line.

Takeaway

Facebook is in the right ballpark, but it’ll need to leverage its money stash to hit a home run here. While I don’t recommend basing your entire opinion of a company on a single quarter, I do recommend keeping a close eye on Facebook’s next quarter to see how mobile revenue grows for the company. Also, if the Facebook phone does indeed get discontinued, listen to what Mark Zuckerberg has to say about any upgrade down the road.

The article What Happened to Facebook’s Money? originally appeared on Fool.com.

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