Facebook's Earnings Call Benchmarks

| About: Facebook (FB)

Ahead of today's long-awaited earnings call, all eyes and ears will be eager to see and hear how Facebook's (NASDAQ:FB) revenue performed in the final quarter of 2012.

Based on the Q3 results, the key performance indicators will include overall revenue, game revenue and advertising revenue split between web and mobile. In Q3, the overall revenue figure was $1.26 billion, a growth of 7% from Q2. Revenue from ads was up 36% to $1.09 billion and revenue from game applications dropped 9% to $170 million. Before the Q3 earnings call on October 23rd, the price of Facebook shares had dropped to $19.50. This was a 51% decline on the original $38 IPO price. The share price closed yesterday at $30.79.

Heavily dependent on the continual growth of its ad revenue will determine whether Facebook is still an attractive stock to potential investors. Mobile advertising to Facebook users, after its March 2012 launch, was reported as 14% of its total ad revenue in Q3.

With the current demand for mobile advertising, together with more advertising agencies offering integrated Facebook ads API technology to advertisers, I am predicting an increase in Facebook's mobile advertising to 25% of its total ad revenue in Q4. So far, I have not seen many ads appear on Facebook's mobile application that are not connected to application installs, which leaves doubt if Facebook mobile really is the destination in the shift of marketing budget from web to mobile for non-application advertising.

With Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO) are also enhancing their mobile advertising offering, Facebook needs to be innovative and show excellent results to its advertisers in order to keep and grow its market share of mobile advertising.

The recent closure of Facebook storefront provider Payvment, indicates that it is blatantly clear that selling on Facebook (f-Commerce) has either still not fully evolved or ever will. With this in mind, it certainly leaves new advertisers wondering if the conversion to real customers through Facebook advertising is really worth the cost.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.