On the back of an analyst upgrade based on optimism about the future of its ad products, Facebook today picked up around 2.8 percent in the public markets. After starting the day at a deficit, Facebook has picked up momentum as its f8 developer conference announced several new products, including the Facebook Audience Network.
Facebook Audience Network is an important product for Facebook, as it allows the social giant to monetize off properties that it doesn’t control. Facebook’s user-data advantage has long been a boon to its mobile ad efforts. Its run from having nearly no mobile ad revenue to generating the preponderance of its advertising top line from mobile usage has been little short of revolutionary for the company.
To see Facebook federate that advantage is almost an implicit admission by the company can more quickly grow its revenue by helping others boost their mobile ad incomes than it can by attempting to hoard the edge. Facebook’s user base will grow as much as it does, but the total audience it can now make dollars off of is larger.
This implies that Facebook’s revenue growth has legs, something that investors are, naturally, interested in.
TechCrunch’s take on the product’s future is optimistic:
The ad network will let it grow revenue without cluttering its own site and apps with more ads. That’s a more sustainable model that insulates Facebook from competition or a slow down of its own user engagement. If users are lucky, Facebook might earn so much from its Audience Network ads shown elsewhere that it could show fewer on its own apps and sites.
Twitter, a company that competes with Facebook for social advertising dollars on both desktop and mobile environments, hasn’t fallen further since Facebook’s announcement. In fact, Twitter has regained a bit of lost ground, opening the day down more than 11 percent, it’s now down just under 10 percent.
A small piece of that could be that Facebook Audience Network will in fact play nice with Twitter’s MoPub:
[I]nstead of competing, the Facebook Audience Network can actually be hooked into the MoPub ad mediation service to let publishers simultaneously run Facebook Audience Network ads along with ones from services like iAd and AdMob.
Twitter and Facebook are both maturing companies looking to diversify their revenue streams. Given that they share much DNA in their core product experience, to see them run in parallel here is not surprising. A better question: Who wins?