Facebook Earnings Preview: Mark Zuckerberg Looks To Keep Dazzling Investors As Mobile Empire Grows

As Facebook continues growing into a behemoth of mobile advertising, both analysts and investors are eager to hear the company's plans for two fast-growing assets, Instagram and Facebook video, which have the best chance to take ad dollars away from TV.

The Menlo Park, California, tech company blew investors away in January by topping off 2014 with a stellar fourth quarter in which it doubled the revenue of its mobile business year-over-year, and many analysts have forecast the company to keep skyrocketing. Analysts estimate Facebook will post earnings of 40 cents per share with revenue of $3.56 billion, which would be a 42.4 percent increase compared to a year ago.

Facebook now has a bigger share of the global online display market (15.4 percent in 2014) than Google 9.5 percent, according to eMarketer. “Facebook has been crushing quarter after quarter in pretty much all of their results,” said Johnny Won, founder of Hyperstop, a tech consultancy firm. “Overall, it looks like Facebook is still this unstoppable machine going down the rails.”

Facebook will release its latest earnings Wednesday after the markets close and will hold a conference call discussing results at 5 p.m. Eastern. Mobile, once the Achilles' heel of the company, is now the most important part of the ad business, and analysts are wondering how much more it can grow. Last quarter, mobile represented 59 percent of the company's total advertising revenue.

Part of that comes from Facebook's ability to track user profiles in mobile, something that has proven very difficult for traditional Web-based online advertisers.

“There’s still some 40 percent of ad revenue that comes from the desktop, and I wonder how much more mobile can gain,” said Debra Aho Williamson, principal social media analyst for eMarketer.

Observers are also hoping Facebook will offer some metrics or insight into the status of the company’s booming video businesses.

Instagram now has more than 300 million users and recently introduced a “carousel” feature that allows marketers to show multiple pictures within the same sponsored post. But even though the service has been showing users ads since 2013, Facebook has never broken out Instagram’s revenue, presumably because it isn’t a significant figure yet.

Investors may want to see Instagram start to contribute, but Facebook knows it must be careful how it goes about introducing ads in large numbers, said Jan Dawson, chief analyst at Jackdaw Research. “I think back to when they first introduced ads into the News Feed on Facebook. They were very careful about how they did that. Facebook really understands the potential of advertising to damage a customer experience,” Dawson said.

Facebook video, meanwhile, has grown into a legitimate challenger for YouTube in the online video space. At the company’s last earnings call, CEO Mark Zuckerberg announced that Facebook now sees more than 3 billion video views per day, and at the company’s developer conference in March, the tech giant announced a feature that lets websites easily embed Facebook videos along with a new tool that makes it much simpler for creators to upload their videos onto the social network -- two features that should boost Facebook’s standing in the online video space.

The big question, however, is how Facebook will be able to monetize this service. “Video advertising works fine if you’re explicitly watching a video and you get a short pre-roll, but with Facebook’s model of auto-play video, advertising doesn’t work great because the only thing that you see as you scroll through your feed is the ad rather than the video itself,” Dawson said.

But with Facebook’s core business, mobile ads in its News Feed, roaring on like an unstoppable machine, the company is under very little pressure to rush the monetization of Instagram, video or any of the other businesses on its bench.