Facebook’s clout growing fast in wireless industry

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Facebook’s clout growing fast in wireless industry

Less than two years ago, disillusioned investors were fleeing Facebook stock, worried the company would never figure out how to make the leap to mobile devices from personal computers, let alone make money on them.

Now, more than half of the giant social network’s advertising revenue is coming from ads for its 1.2 billion users on smartphones and tablets. And it’s buying the program called WhatsApp after outbidding rival Google Inc. for the most popular mobile app for sending messages on smartphones.

Facebook’s big shift to wireless helped give Chief Executive Officer Mark Zuckerberg top billing this week at the Mobile World Congress in Barcelona, Spain, his highest profile yet at the industry’s largest trade show.

“It took Facebook awhile to recognize the shift to mobile but once they did, they turned on a dime,” said David Kirkpatrick, author of The Facebook Effect. “This was a victory lap for Facebook as a mobile company.”

At the time of its initial public offering in May 2012, Facebook looked as if it might get left behind as consumers increasingly ditched computers for mobile devices.

With its stock value plummeting, Zuckerberg had one challenge greater than all others: reinvent Facebook from its roots in personal computers into a company geared to the mobile generation.

Results came quickly.

In last year’s final three months, Facebook picked up more than half of its advertising revenue from its 945 million mobile users. And in a major move, it agreed to pay $19 billion in cash and stock for mobile messaging phenomenon Whats­App, the tiny, 55-person company that provides a cheap, easy way for 465 million users worldwide to send text messages and photos.

Despite the eye-popping price tag, Wall Street has rewarded Facebook’s chutzpah. Facebook has gained 30 percent this year, giving it a market value of more than $180 billion.

Facebook hasn’t just caught up in mobile. With WhatsApp, it could become an even more significant force in the wireless industry.

WhatsApp Chief Executive Jan Koum, also speaking at Mobile World Congress, said his company would begin offering voice calls this spring. The news sent shudders through the telecommunications industry, which lost $32 billion in revenue last year to companies offering free texting, according to research firm Ovum.

Device makers and wireless carriers need Facebook to drive more people to spend time and money on mobile phones. And they certainly benefit from skyrocketing demand for mobile data access. But the industry is growing collectively more concerned about Facebook’s fast-growing footprint.

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