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Earnings Preview: Facebook posts 3Q results Tues.

Associated Press Modified: October 22, 2012 at 12:30 pm •  Published: October 22, 2012

NEW YORK (AP) — Facebook Inc. will report its third-quarter earnings results — the second as a public company — on Tuesday after the stock market closes. With its stock trading at less than half of its initial public offering price, the online social networking company has been working to grow its advertising revenue without alienating its 1 billion users.

WHAT TO WATCH FOR: Online advertising rival Google Inc.'s disappointing results, announced prematurely last Thursday, dragged Facebook's stock lower too. Google's ad revenue grew at the slowest pace in three years in the July-September quarter, which some investors took as a sign that Facebook could see a slowdown too.

Susquehanna analyst Herman Leung thinks a big area of focus will be Facebook's progress in mobile advertising. Facebook only recently started showing ads, which it calls "sponsored stories," on mobile devices. The challenge with small screens is showing the ads without annoying users.

The company has launched several new products and features recently that could boost revenue growth. These include the Facebook Exchange, which lets advertisers target users in real-time, based on outside websites they visit. So if you visit a store's website, you might see ads from them on Facebook. A gifts feature, meanwhile, lets users buy physical gifts for their friends through their Facebook account. Investors will be looking for updates on how these and other new features have fared.

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