Facebook has announced revenues of $2.5bn for the first quarter of 2014, an increase of 72%, with mobile app install ads providing the bulk of its growth, and investors reacting positively to the results. However imminent competition for mobile app install ads from both Google and Twitter may mean the success is short-lived.

The social network reported that advertising revenue for the first quarter was $2.27bn, an 82% annual increase, with mobile advertising revenue representing approximately 59%, up from 30% of ad revenues the year beforehand. Payments and other fees revenue was $237 million for the first quarter of 2014.

In terms of dollars, mobile ad revenue was about $1.34bn in the quarter, compared to $374m a year ago, equating to growth of 258% year-on-year, a sterling vindication of Facebook’s strategy of opting to monetise using mobile app install ads, which have clearly resonated well with both long tail app developers, and major brands alike.

Mark Zuckerberg, Facebook CEO, said: “We’ve made some long term bets on the future while staying focused on executing and improving our core products and business. We're in great position to continue making progress towards our mission.”

Facebook also used the quarterly filling to help dispel any notions of ‘Facebook fatigue’, announcing that daily active users (DAUs) were 802 million on average for March 2014, an increase of 21% year-over-year.

Meanwhile, mobile DAUs were 609 million on average during the same period, an increase of 43% year-over-year. Plus monthly active users (MAUs) were 1.28 billion as of March 31, 2014, an increase of 15% year-over-year, with mobile MAUs numbering 1.01 billion as of March 31, 2014, an increase of 34% year-over-year.

During the company’s quarterly earnings call, it revealed plans to bolster non-advertising revenues, while also announcing that its CFO David Ebersman, will step down and be replaced by David Wehner – currently Facebook's VP, corporate finance and business planning – in June this year.

Investors reacted positively to the results with Facebook’s stock value rising by over 3% to over $63 in the early hours after the filing, with Brian Wieser, Pivotal Research Group, senior analyst, advising investors that Facebook’s long term prospects were buoyant.

In a note to investors he said: “As we have written previously, several new initiatives launched in the past year and a half have driven a significant volume of revenue into Facebook, including FBX, mobile app install units, an active effort to court small businesses (who we believe are incrementally shifting spending away from Google and towards Facebook) and ongoing international expansion.

“We noted earlier this month that we expect strong growth to continue through the remainder of this year, at minimum, and probably more than most expect.”

Additionally, he noted: “For 2014, we now forecast 51% total revenue growth, vs. 47% previously.”

Facebook’s strong results – based primarily on its mobile app install ad units – come within a week go Twitter announcing it is to launch a similar product that lets users download apps from within the ‘interest network’, as it bids to further woo spend from app developers – read more on the launch here.

This was subsequently followed by Google announcing another similar app install product earlier this week, with the search giant revealing that it would offer developers the ability to target users that have downloaded similarly themed apps. This was accompanied by a complementary service that will let app developers re-engage with users that have downloaded their app, and subsequently left it dormant.

A blog post announcing the launch read: “Over 80% of downloaded apps are used only once and then deleted… Today we announced a new app re-engagement campaign type in AdWords for both search and display so that consumers can be taken directly into already-installed apps.”

This heightened competition in the app install sector led Pivotal Research Group’s Wieser to add a note of caution to his otherwise glowing appraisal of Facebook’s prospects.

“App installs were called out as the company now has 350mm to its credit since launching the offering in late 2012. Assuming the company sold 100mm during 1Q14 vs. 25mm during 1Q13 and further assuming some price inflation on a low single dollar average cost per install, it seems likely that this product added several hundred million dollars of ad revenue in the quarter” he said.

However, in his risk assessment he also noted a “high degree of rivalry given absence of barriers to deter new competition from emerging.”