Facebook Inc. plans its first push into mobile advertising by the end of March, giving the company a fresh source of revenue ahead of a possible initial public offering, two people with knowledge of the matter said.
An idea being considered is putting Facebook’s Sponsored Stories ads, which feature friends’ interactions with brands, within the mobile News Feed, said the people, who declined to be identified because the plans aren’t public. The News Feed lets users view status updates, photos and other content.
Facebook, the world’s most popular social-networking service, would be playing catch-up in mobile advertising to Google Inc., Apple Inc. and Millennial Media Inc. Facebook’s potential advantage is that by gathering so much information about a person’s interests and associates, it can help advertisers target potential customers more directly than mobile Web browsers or applications.
Facebook, which boasts more than 800 million users, is increasing its focus on mobile technology, aiming to take advantage of the shift to smartphones and tablets. The company expects its next 1 billion users to come mainly from mobile devices, rather than desktop computers. More than 350 million users already access Facebook through their mobile devices, according to the site.
Later Than Expected?
The company had originally expected to roll out the new advertising service on mobile devices earlier this year, and the plan could be delayed again, one of the people said.
Brandon McCormick, a spokesman for Facebook, declined to comment. Facebook announced a mobile deals service last year that lets companies reach out to potential customers with discounts based on location.
The Palo Alto, California-based company is considering raising about $10 billion in an IPO that would value the company at more than $100 billion, a person with knowledge of the matter said last month. The company may file for the IPO before the end of the year, the person said.
Facebook’s revenue will climb to as high as $6.9 billion in 2012, up from $4.27 billion this year, according to research firm New York-based EMarketer Inc. Almost 90 percent of 2011 sales will come from advertising revenue, the firm estimates. Facebook also makes money from its Credits business, which takes a commission on transactions in certain applications, such as games.