5:03 p.m. | Updated with closing share price.
In an earnings call with financial analysts on Tuesday, Mark Zuckerberg, Facebook’s chief executive, talked not about changing the world, but about making money. He talked a lot about making money — through ads, through commerce and, crucially, through the mobile phone. And he presented numbers that signaled his company was increasing profits faster.
On Wednesday, Wall Street seemed to hear the message. Facebook’s stock price soared by about 19 percent, closing at $23.23. It was the biggest single-day gain in the stock’s nascent history. The ascent was as sharp as the fall. Facebook shares had lost half their value since the company’s ambitious public offering in May.
The swing suggested what a conundrum Facebook can be to Wall Street. It is not a conventional business. It has a billion users, but its principal stream of revenue comes not from directly selling them goods and services, but by offering marketers a chance to target tailored advertisements to them, based on what they reveal about themselves.
Revenue growth had slowed in the first two quarters. But the third-quarter numbers showed that the company was keeping pace, growing by 32 percent. Crucially, the numbers showed that of the roughly $1 billion that the company took in from advertising — its principal revenue source — 14 percent came from showing ads to Facebook users on mobile devices. The challenges involved in the world’s shift to mobile computing is roiling the tech industry, and Facebook is no exception; six out of 10 of its users log in on their smartphones.
Facebook still trails Google in online advertising, both on desktop and mobile. Analysts say that like Google, Facebook will most likely have to roll out an ad network that allows marketers to reach Facebook users wherever they are — whether they are browsing the Web or downloading a mobile application. Facebook is experimenting with this notion, on desktop and mobile. Marketers can target Giants fans in San Francisco not only on their Facebook newsfeeds, but also by floating an ad when they’re on an unrelated mobile application.
“Clearer corporate narrative conveyed on earnings call as focused on mobile, platforms and monetization,” Brian Wieser, an analyst with Pivotal Research Group, wrote in a report Wednesday morning.
Mr. Zuckerberg, in contrast to the past, repeatedly suggested that he was keen on delivering returns to Wall Street. “I want to dispel this myth that Facebook can’t make money on mobile,” he said early on in his 10-minute opening remarks. He pointed to advertising products that make it “easier for marketers to reach their customers.”
He also dangled the possibility of “more commerce” on Facebook, citing a new product that allows people to buy gifts for their Facebook friends on their birthdays. That, he said, provides Facebook “an opportunity to learn how people buy things.”
They were all nods to the market. He may not have shed his hoodie for an Hermès tie, but Mr. Zuckerberg seemed to suggest that he understands what it means to lead a public company.