New York (CNNMoney) — Facebook's fourth-quarter earnings and sales beat Wall Street estimates, but mobile remains Wall Street's top focus -- and investors briefly freaked out when mobile user growth wasn't as robust as last quarter.
Shares of Facebook plunged as much as 10% in after-hours trading, but quickly recovered to a more modest 3% drop. The number of monthly active users on Facebook's mobile site and apps grew 57% over the year to 680 million. But that wasn't as strong as the 61% over-the-year jump Facebook had in the third quarter.
Mobile has long been a concern for Facebook. In the months right after its May IPO, the company said it wasn't making "any meaningful revenue" from mobile.
That changed in August, when the company launched a new Apple iOS app and began showing ads to mobile users. Those ads include Sponsored Stories and other nudges to "like" company pages.
Mobile ad revenue accounted for 23% of Facebook's advertising revenue for the fourth quarter, or about $306 million. That's up from 14% last quarter
Investors expect Facebook to continue expanding that mobile audience at a rapid clip.
Overall, Facebook earned 17 cents per share (excluding some compensation and tax expenses) on sales of $1.6 billion for the fourth quarter, up 40% from Facebook's sales of $1.1 billion a year ago. Both figures beat analysts' estimates.
Also on the advertising front, Facebook in September launched its Ad Exchange system, which lets advertisers bid on the social network's display ad space. It also lets them put cookies on users' computers to track people as they crawl the Web, and "retarget" those users with related ads when they log back on to Facebook.
Earlier this month, Facebook launched Graph Search, a tool that lets users search their social connections for information that their friends have shared. It focuses on "natural language" queries such as "music my friends like," "people who like soccer and live near me," or "photos of my friends before 2004.