Why more mobile access worries Facebook ahead of its IPO

The latest data shows that more and more users are beginning to access Facebook via mobile phones as opposed to computers, and Facebook is not happy. The average time spent accessing Facebook via smartphone in the United States was 441 minutes in March, compared with 391 minutes via computer, according to comScore. comScore’s new Mobile Metrix 2.0 report showed U.S. smartphone users spent 441 minutes per month, or 7 hours and 21 minutes, on Facebook in March. That compares with 391 minutes, or 6 hours and 31 minutes, for people who tapped into Facebook via a computer. [caption id=“attachment_305955” align=“alignleft” width=“380” caption=“The statement by Facebook is effectively a profit warning: Reuters”]  [/caption] In filing documents for its initial public offering, Facebook highlighted the fact and noted that it does not generate meaningful revenue from mobile users. “If users increasingly access mobile products as a substitute for access through personal computers and if we are unable to successfully implement monetization strategies for our mobile users,” the company writes in its filing documents, “our financial performance and ability to grow revenue would be negatively affected.” The changes made to the regulatory filings show that mobile is an increasingly urgent problem for Facebook to solve in order to continue its financial growth. The Telegraph said that the statement was effectively a ‘profit warning’. Three days later, Facebook announced that it was planning to launch an app store for mobile users. As well as showcasing popular apps, such as the game Draw Something, on Apple’s and Google’s app stores, Facebook will sell apps based exclusively on its network and take a 30pc share of revenues. Analysts say that the move to buy Instagram, a photo-sharing mobile app, for $1 billion was also an almost panicked move to increase mobile revenue. “It was a reactive, almost panicked reaction to usage statistics,” said Sam Hamadeh, founder of research firm PrivCo to The Telegraph. Historically, Facebook hasn’t shown ads to mobile users, although in March 2012 it started including “sponsored stories” in users’ mobile new feeds. March marks the first month comScore measured mobile usage – for Apple’s iOS, Google’s Android and RIM’s Blackberry – on sites like Facebook. Facebook commands the lion’s share of smartphone users’ time, comScore data showed. The next-most popular services were check-in services Foursquare, with 146 minutes; microblogging service Twitter, with 114 minutes; and blogging-service Tumblr, with 68 minutes. Facebook likely racked up more minutes because people like to stay on to craft updates, read friends’ updates, and respond, said Michael Pachter of Wedbush Securities. By contrast, “it doesn’t take that long to tweet,” he said. Facebook’s rich valuation – approaching $100 billion at the high end – is in part based on high levels of user engagement. Facebook cautioned in its filing documents that as growth in its numbers of users slows, its “business performance will become increasingly dependent on (its) ability to increase levels of user engagement in current and new markets.” With inputs from Reuters