Facebook Stops Testing A Hugely Lucrative New Business

Mark ZuckerbergFacebook CEO Mark Zuckerberg.

Facebook has stopped its experiment with placing mobile ads on other apps and websites, Peter Kafka reports on AllThingsD.That means plans to launch a full-fledged mobile ad network to challenge Google are on hold, at least for a few months.

A company spokesperson told Kafka that the company stopped the test to focus on selling ads on its own mobile app.

That makes some pragmatic sense: If Facebook has ad space to sell on its own properties, why spend energy brokering ads for third-party publishers?

But it also calls into question whether Facebook has bitten off more than it can chew this year. It’s rolled out at least 12 ad products, and a desktop Web-display ad network is also expected to appear somewhere in the future.

Facebook also owns Instagram, which has attracted its share of controversy for publishing new terms of service that would allow it to put ads on the mobile photo-sharing app.

We asked Rob Leathern, the CEO of Optimal, one of the companies that Facebook has tapped as a “preferred marketing developer.” Optimal helps clients run campaigns on Facebook.

“The magnitude of Facebook’s owned and operated/native mobile ad opportunities in the near term is huge,” Leathern said. “Given their bandwidth, I think it is probably just a prioritization decision. optimising ad units for performance is not a trivial undertaking at their scale.”

But hitting pause on Facebook’s ad network could disappoint investors, who’d like to see Facebook develop new sources of revenue beyond its core service.

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