new social search tool could become important businesses in the future. But in the near term he said that Facebook's advertising efforts will be the core of its business.
The number of monthly active users on the social network reached 1.06 billion at the end of last year, with 618 million daily active users, Facebook said. But much of that growth again came from emerging markets like Asia, rather than the United States or Europe, where revenue per user is several times higher. For instance, average revenue per user is $13.58 for the United States and Canada, but just $2.35 in Asia.
Overall fourth-quarter revenue came to $1.585 billion, up 40 percent versus $1.131 billion a year earlier. Analysts were looking for revenue of $1.53 billion.
Executives said some revenue from its payments business dating back to September 2012 had been booked in the October-December quarter, inflating the number somewhat. Excluding those deferred sales, overall revenue would have been up just 34 percent in the quarter.
But it was the fledgling mobile business that dominated Wednesday's discussion on the call. Finance Chief David Ebersman said Facebook had "basically doubled" mobile ad revenue from the third quarter to the fourth quarter.
"Two quarters ago we really had no mobile revenue," Ebersman told Reuters in an interview. "In the course of a pretty short period of time, we've dramatically ramped up our ability to monetize mobile."
Facebook said net income in the fourth quarter was $64 million, or 3 cents a share, compared to $302 million, or 14 cents a share a year earlier.
Excluding certain items, Facebook said it earned 17 cents a share, compared to the 15 cents a share expected by analysts polled by Thomson Reuters I/B/E/S.
Facebook expects expenses -- excluding stock-based compensation for employees -- to jump 50 percent in 2013, likely outpacing revenue growth. Capital investments may climb to $1.8 billion, up 14 percent from last year's $1.575 billion.
"They're going to have to continue to develop new products, which will cost them," said Bhatia of Sterne, Agee & Leach.
But he said, "the market would be less happy if they were not finding enough opportunities."