Facebook Could Make $1.2 Billion from Mobile Advertising in Major Markets

British analyst firm, Mobile Squared, believes that Facebook stands to make big bucks whenever they enter the mobile advertising business. The company speculates that Facebook would make roughly $6.50 per subscriber each year in its major markets which include the U.S., U.K., France, Germany, Italy, and Spain, a full $2.00 more than than it currently makes per user on its website according to Facebook’s S-1 filing. Using an estimate of 185.3 million users in those markets times $6.50 puts you at $1.2 billion.

Not too shabby. The only hang up would be if Facebook chooses to use a different advertising format than was assumed by Mobile Squared which was display-style ads.

Of the $1.2 billion, Mobile Squared estimates the U.S. will account for $653.7 million per year, or roughly half. U.K. would bring in $166.6 million, $100 million each from France, Germany, and Italy, and $70 million from Spain. Other smaller markets such as Turkey, Brazil, and Indonesia would also bring in additional advertising revenue, but Mobile Squared felt that the CPMs (cost per thousand impressions, or cost of advertising in other words) from the smaller markets were too unstable to factor into their estimates.

Ingrid Lunden of TechCrunch is quick to point out that there is one major flaw in Mobile Squared’s speculation and that has to do with the uncertainty of which ad format Facebook may choose to use. Lunden says that it’s likely that Facebook may initially use a sponsored stories advertising format that would appear in a user’s time line rather than display format ads which are assumed by Mobile Squared. There is also some debate over how much “liking” a company is really worth. Nick Lane of Mobile Squared asked Lunden, “Thirty-six million follows, but what does that mean in relation to a brand like Coke?”

To contact the reporter on this story: Ashley Cloninger at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com