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Facebook has identified mobile as “critical to maintaining user growth and engagement over the long term,” while acknowledging that this market is not without its challenges. In a document supporting its US$5 billion initial public offering, the social networking giant said that “we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”

It notes that if users move toward mobile Facebook access as a substitute for PC use, “if we are unable to successfully implement monetisation strategies for our mobile users, our revenue and financial results may be negatively affected.”

The company highlighted the potential of the mobile advertising market, quoting an “industry source” which forecasts a 64 percent compound annual growth rate to US$17.6 billion in 2015. While it did not detail its plans, it said that “we may have potential future monetisation opportunities such as the inclusion of sponsored stories in users’ mobile News Feeds.”

The “substantial majority” of Facebook’s revenue comes from advertising – accounting for 85 percent of sales in 2011. For 2011, the company noted a net profit attributable to shareholders of US$668 million, on revenue of US$3.71 billion.

The company said that in December 2011 there were more than 425 million monthly active users (MAUs) of its mobile products, and that “we anticipate that the rate of growth in mobile users will continue to exceed the growth rate of our overall MAUs for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile use of Facebook.”

In total, the company has 845 million MAUs as of 31 December 2011, an increase of 39 percent year-on-year.

Fred Huet, MD of Greenwich Consulting, noted: "The company dominates the online market, with saturation at 800 million users worldwide. If Facebook manages to translate that to mobile, where the opportunity in emerging markets remains, it could be on to a winner. However, with so many mobile players present in the location-based services, deals and payments space, Facebook will have to ensure continued innovation to resist disruption to its so far rapid growth.”

The social networking company also noted that “we are dependent on the interoperability of Facebook with popular mobile operating systems that we do not control, such as Android and iOS.” It said it is “devoting substantial resources to developing engaging mobile products and experiences for a wide range of platforms, including smartphones and feature phones."