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Facebook wins back friends on Wall St

Wednesday, October 24 17:18:58

Facebook's shares headed towards their biggest one-day jump today after the company reported a surprising rise in mobile advertising, easing concerns it was having trouble capitalising on soaring use of smartphones and tablets.

Facebook shares, sold for $38 each in their initial public offering in May, were up 20 percent at $23.61 in late morning trade. The stock was the top percentage gainer on the Nasdaq.

Several brokerages raised their price targets on Facebook shares. Barclays Capital raised its target to $26 from $23, Jefferies and Co to $32 from $30 and Macquarie Equities Research to $24 from $21.

Facebook, which reported third-quarter results on Tuesday, said it now gets 14 percent of its advertising revenue from mobile ads, a far bigger increase than mostly sceptical analysts had expected. Mobile advertising has been a key investor concern hanging over Facebook, shaving more than $50 billion off its market value since its IPO.

The world's largest social network passed 1 billion active users in September but failed to dispel doubts about its mobile strategy.

Chief Executive Mark Zuckerberg said on Tuesday that the mobile opportunity was "the most misunderstood" aspect of Facebook's business.

Rivals such as Google are also struggling with a shift in consumer preference to mobiles from PCs.

Marrisa Mayer, chief executive of struggling internet pioneer Yahoo Inc, said on Monday her top priority was to fashion a coherent strategy to manage the industry's transition to mobile devices. (C ) Reuters