Facebook admits young teens are losing interest in the site

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Old 31-Oct-2013
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Facebook admits young teens are losing interest in the site

Facebook admits young teens are losing interest in the site

Investors love Facebook's mobile growth over the past year.

Facebook shares soared 15% Wednesday on blowout quarterly results -- but the stock lost steam after the company admitted young teens are losing interest in the site.

"We did see a decrease in [teenage] daily users [during the quarter], especially younger teens," Facebook chief financial officer David Ebersman said Wednesday, during the company's third-quarter earnings conference call with analysts. He said Facebook usage among overall U.S. teens was "stable," however.

Previously, Facebook had defended itself against multiple recent studies and articles proposing that teens don't find Facebook cool anymore. Last quarter, CEO Mark Zuckerberg said it "just isn't true" that the company has a problem with the teen market.

Ebersman's admission -- coupled with other bits from Wednesday's call, including the fact that Facebook isn't planning to ramp up the number of ads in users' feeds -- sent Facebook shares slightly lower in after-hours trading.

That was a big disappointment given that Facebook (FB, Fortune 500) shares had been up as much as 15% earlier in the evening, after blowing away Wall Street's sales and profit expectations for the third quarter.

Facebook's sales jumped 60% over the year to more than $2 billion. Excluding one-time charges, Facebook earned $621 million -- double the company's profit during the same quarter last year.

Strong mobile results: Perhaps even more pleasing to investors was that Facebook's mobile business in particular came in very strong. Mobile ads now account for 49% of all Facebook ad revenue, up from 41% last quarter and easily beating analysts' expectations.
That's impressively rapid growth, considering that Facebook began serving mobile ads just last summer.

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