Facebook is slowly cracking the mobile nut

Shares of Facebook soared this morning after the company posted a surprisingly positive quarter thanks largely to improving mobile ad revenues. The company said its 8-month-old mobile advertising business generated $153 million during the quarter, accounting for 14 percent of its overall revenues.

The news prompted a huge sigh of relief from investors who had grown increasingly concerned about Facebook’s ability to monetize mobile — and, in some cases, about the potential of mobile advertising overall. And it’s worth noting that Facebook has only dipped its toes in the water here: It launched a very basic “sponsored posts” program in March that place ads on the home screen of its apps, and just last month it began testing a kind of mobile ad network that delivers ads through other apps.

Those efforts offer just a hint of Facebook’s potential in mobile advertising. The social network not only has a massive user base and a growing list of advertising partners, it can tap the power of location with its check-in feature. I don’t expect Facebook’s mobile ad revenues to see exponential growth — there are still too many hurdles to overcome — but I do expect to see solid incremental increases for quite a while.