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Tuesday, January 15, 2013

What will Facebook's big news be? Some contenders

originally appeared in USA Today:

Silicon Valley's latest parlor game this week is what Facebook is up to on Tuesday, when it announces news at its headquarters in nearby Menlo Park.

Anticipation of the first big news from Facebook in months has prompted investors to snap up shares and push them above $30 — though still shy of the company's IPO price of $38 in May. Facebook closed at $30.95 Monday.

The early money is on search engine-related news, given its high financial stakes. Google's share of the overall U.S. mobile ad market — 57%, compared with Facebook's 9% — is largely because of its search business.

Facebook might also make a more aggressive push into gaming or leverage its $1 billion acquisition of photo-sharing site Instagram.

Other possibilities include new ad formats, mobile ad advancements and an external ad network, according to the CEO of Didit.

Facebook raked in about $4.2 billion from advertising last year — 84% of its estimated $5 billion in total revenue, according to eMarketer. Leading the charge were mobile display sales. Facebook took home about 18% of the U.S. market last year — or $339 million — besting Google's 17%.

Google took home 15% of the nearly $15 billion U.S. display ad market, with Facebook close behind.

Payments accounted for Facebook's remaining $800 million in 2012 revenue, eMarketer estimates.

Long odds are on a long-rumored smartphone announcement coming Tuesday despite mild protestations from CEO Mark Zuckerberg at a September public interview.

The mobile space is a particularly bedeviling proposition for Facebook, which has been late to the market even as Americans continue to eschew PCs for smartphones and tablets.

EMarketer estimates 70 million people in the USA regularly access Facebook from a phone — about half of Facebook's active domestic audience.

The marketplace has room for a Facebook phone, according to a telecommunications analyst that follows Facebook said in a note last week. Today, only Apple and Google are heavy hitters.