The market looked ugly today, with the S&P 500 off 1.44%, but after-hours earnings are leading to big gains for Facebook (META -4.13%). Let's look at why the company is rising and whether those gains make sense. 

Facebook beats, shares jump
The headline on Facebook is pretty simple: It beat on both sales and earnings. Sales came in at $1.26 billion versus expectations of about $1.23 billion, and adjusted earnings landed at $0.12, beating expectations by a penny. 

That's a situation actually not too unexpected. Facebook had sold off last week following Google's (GOOGL -1.23%) poor earnings. However, as I noted in an article yesterday, that sell-off was misguided. Google's display advertising business -- the one that mirrors Facebook's own business model -- held in pretty well last quarter. Not only that, but in its conference call Google also revealed that its mobile business was at a run rate of $8 billion in sales a year. The fact Google was continuing to monetize in a better fashion with mobile was a positive for Facebook, as the company until recently made no money on mobile. Comparing Facebook with past quarters meant any mobile success was nearly all upside. 

So it shouldn't be any shock that front and center of Facebook's earnings, the company highlighted that 14% of its revenue came from mobile last quarter. With investors worried the company was in trouble, as more than 600 million of its users became monthly mobile users who don't generate nearly the sales desktop users do, it came as a relief to see Facebook claim 14% of its revenue from mobile. 

Then on the company's conference call, Mark Zuckerberg took pains to emphasize the mobile opportunity. He called mobile the "most misunderstood aspect of Facebook today," noting that higher engagement on mobile will eventually drive more revenue than desktop users. 

Sorry, Zuck, I'm not sold
That's a nice story from Zuckerberg, but I'm inclined to be skeptical. Here's why. Whenever advertisers begin a new form of advertising, it outperforms in a huge way. Early third-party research showed users were 10 to 15 times as likely to click a mobile ad on Facebook than they were a desktop ad. 

However, mobile ads were also brand new, and Facebook didn't just dip a toe in the pool -- it's begun mobile advertising in a very aggressive way. While that can be very effective at the start, "banner blindness" quickly sets in as users learn to filter out advertisements. This is the same phenomenon we've seen on PCs; it just played out 15 years ago. 

Not only that, but studies have also shown that 40% of mobile ads are either misclicks or fakes. Users might click more on ads at first, but as they learn the difference between what a sponsored post and a regular one look like, those clicks fade away.

The moral of the story: While it's easy to get excited about a new form of advertising that's effective, the real test comes after users have been exposed to it for long periods. 

Still a lot to prove
The bottom line is that mobile revenue will probably continue increasing as a percentage of Facebook's sales, because mobile use is cannibalizing desktop page views. Not only that, but quotes in Facebook's conference call also indicated mobile continued growing throughout the quarter. Based on that, it's a near certainty Facebook's percentage of mobile sales will be significantly higher next quarter. Wall Street estimates will be raised, and the company will see continuing gains this week. That's a win if you're in Facebook for the short term. Yet over the long term, the situation still has a lot to be proven.

Keeping mobile ad rates up as users become acclimated to them is a difficult trick for Facebook. The company outperformed this quarter, but the real test of its effectiveness in mobile isn't this quarter; it's the one a few quarters down the road. 

Deciding whether Facebook is a buy is no easy task. With its busted IPO, most storylines focus on the negatives around its short public history rather than taking a balanced and comprehensive look at its opportunities ahead. The Fool's tech analyst Evan Niu has created a premium report that looks past the headlines to assess whether Facebook will be great or another overhyped dot-com bust. Access your report by clicking here.