Facebook's revenue grew 49 percent in the fourth quarter, as mobile advertising growth helped the world's largest Internet social network beat Wall Street's targets for earnings and sales.

But revenue growth was the weakest since the start of 2013, and spending rose faster. Facebook shares fell about 2.6 percent in after-hours trade after vacillating above and below the closing price.

Facebook reported fourth-quarter profits of $701m (£462m), a 34% increase on the same period a year ago.

Total profits for the year were $2.9bn, almost double the total for 2013.

"Facebook did exceed expectations, one of the most interesting things about the company, frankly, is that it's reliance on mobile devices is really growing," said Ian Sherr, Executive Editor at CNET News, noting the strong quarter.

The company said on Wednesday it ended 2014 with 1.39 billion monthly users, with 86 percent of them accessing its service on smartphones and other mobile devices.

Mobile ads accounted for 69 percent of advertising revenue in the fourth quarter, or $2.48 billion.

Many investors are betting that video ads, which Facebook began offering last year, will provide the company's next leg of growth.

"Well, right now, investors pretty much had expected a lot of what Facebook said, they did do better than most analysts' estimates, but at the same time, one of the things that's challenging Facebook is their costs," said Sherr, "so investors are getting their heads wrapped around this idea that this company is not going to just sit back, make money, return money to investors. They're really going to be aggressive in their spending, and they believe the aggressive spendingis going to win out over time."

Facebook has warned that 2015 will be a year of heavy investment, as the company steps up efforts to expand a collection of products that include messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift.

Facebook's revenue growth during the fourth quarter was exceeded by its operating expenses, which grew roughly 87 percent as a result of sharp increases in research and development costs and marketing and sales spending.

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