Research archive for META

Facebook reported numbers post the market close last evening. Once your base grows bigger and bigger it becomes a mathematical impossibility to grow at the same rate. Firstly, most of the users have adopted Facebook already that were keen to do so and secondly your potential user group gets smaller. I guess one could argue that if every human with a reliable internet connection had a Facebook account, the company could have a whole lot more than 1.32 billion users. Roughly 63 percent of that base use Facebook daily. Monthly active user growth is around 3.5 percent, which I think is astonishing, others are not wowed. 40 million users were added in the last quarter and now one in five people around the world log into their Facebook accounts on a monthly basis. Differently put 4 in 5 do not have a Facebook account.

Last night we received highly anticipated results from Facebook. It's ironic that Apple results and Facebook results are released on the same day because the efficiency of the Apple products have made the Facebook mobile experience just that much better. Conversely people want fancy phones so they can access and enjoy their Facebook. Both companies compliment each other well.

Crazy. This is amazing, WhatsApp zooms to record 64 billion messages in one day. But what was quite amazing is that this announcement came on .... Twitter. Reminder. Facebook bought WhatsApp for 19 billion Dollars. Twitter is worth 27 billion Dollars. So, WhatsApp, owned by Facebook, sends record number of messages and then announces it on Twitter. Got it.

Everyone knows about Facebook, it is an extremely visible company for obvious reasons. When they do stuff like buy Whatsapp for $19bn it becomes the latest talking point around the dinner table. If GE were doing such a large acquisition it would draw half the interest. When these acquisitions are discussed the biggest talking point is why Facebook would buy such a company and how would they integrate it with their current business model. People um and ah, trying to justify the acquisition.

What the hell? Who? What? Actually someone had told me a small while back that this was the next big thing, and that it was likely to crush console's as we know them. Your PS3 is so out of date that it might as well be R2-D2 or C-3PO. OK, that is nasty, your PS3 is still as awesome as Schalk Burger. Who IS REALLY awesome! What am I talking about here? Rambling on. Well, it is Facebook and a purchase that probably came from left field. Deep square leg, or make that deep extra cover. Oculus VR is the object of Facebook's attention, and the price range is a whopping 2 billion Dollars. There is a private investor who sits on both boards, and coincidentally Instagram too - Marc Andreessen is his name, he DID NOT participate in the negotiations. Palmer Luckey founded this business in 2012. And Palmer is all of 21 years old. That is it chaps. What were you doing when you were 21? Were you selling a business to Facebook for 2 billion Dollars? No, sadly we were not.

Wow, this is absolutely huge. No, it is one of the biggest tech deals done in a while, a 19 billion Dollar transaction in which Facebook will acquire WhatsApp. The deal will be structured as follows: 183,865,778 A class Facebook shares worth 12 billion Dollars (at 65.2650 Dollars a share), 4 billion Dollars in cash and the balance, 3 billion Dollars in restricted stock (45,966,444 units) to WhatsApp employees, that will vest over the next four years. The shareholders and employees of WhatsApp will now own 7.9 percent of Facebook, you will of course be diluted as a Facebook shareholder, but will get WhatsApp, of course.

Facebook turns ten today. Amazing. Do you know any business who has over 1.23 billion customers, that is almost the entire population of India. Wow. But annual ARPU's are a mere 5.68 Dollars, astonishingly low. Each customer generates 1.55 US cents per day. That is another way of thinking about it. Low. And I guess that there are still many more opportunities to monetise that massive base.

Facebook. I remember that they were not going to be able to monetise mobile. Now it is more than half of their revenue. They were running out of teenage users. Who cares, who pays their bills? Their parents. And some old fellow I remember who covered Facebook made a great point on the box once, he said that his teenage kids see their friends every day, he hardly ever physically sees his mates from college and school, except for Facebook. For all I can, Facebook could have one fifth of the users and double the revenue. But of course they need to monetise their user base. And guess what, they are!! The business turns ten next week. Yes. Only ten, or ten already, depending on which way you look at it.

Facebook reported numbers last evening. 49 percent of revenue came from mobile, let us call it half. And I remember when everyone would get completely anxious that yes, Facebook would struggle to monetise mobile. Here is a headline from Fortune's website from July last year, which is hardly a long time ago:

Facebook. Me like. You like. Not much to not like about last evenings quarterly numbers. I was saying to Byron this morning, for crying in a bucket, this time last year the so called experts were incredibly anxious about the fact that Facebook was perceived to be unable to monetize across their mobile platforms. Well guess what, Mark Zuckerberg is smarter than most people, including the chattering classes of "investors" out there. So what if the stock price didn't pop and the IPO was a disaster. Are we all scalpers now? The company raised more money at a higher rate than the market anticipated after the greed got the better of everyone.

Yesterday the fellows over at Facebook announced that they were going to be adding a "Vine-like" video feature through your Instagram app on your phone. I updated my Instagram and hey presto, posted my very first video online. Which includes interactions with my lovely wife on the feed commentary. So join Instagram and start following your friends and post your pictures that way, you can either choose to be private and have only your mates follow you, or be public and post many pictures and now videos.

Facebook had their annual and fourth quarter numbers yesterday. Like Amazon.com this is a company that is on a crazy upward trajectory, so sometimes it might be difficult for some to judge the stock reaction. Both the instant numbers (which is a little like drinking instant coffee, you can tell, I am a snob in this department), top line and bottom line beat expectations, but there was a marked surge in costs. Costs that were increased by adding more infrastructure as well as more staffers in order to be able to continue to innovate. Because ultimately that is what you are buying here. Costs and expenses increased a whopping 82 percent in the quarter. The company on a GAAP basis made nothing last year, on a per share basis it clocked one cent. A penny for 2012. On a non-GAAP basis the company earned 56 US cents per share. So, basically the multiple is infinite. For the time being.

Facebook launched their third big offering, or that was what I was led to believe, last evening. A search function. With a weird name, "Graph Search". Now, according to the Business Insider who suggested that Facebook should have just called it "Facebook search", the term in tech world, social graph, refers to your network. Even Facebook network would or could have worked a bit better. If you are looking for the Facebook explanation, look no further: About Graph Search. As Paul said, this only works well if you make sure that your mates are active and you make sure that you are active. If you are active and post where you have been, what it was like, what you like, then one can get a better search result for all concerned.

Facebook stock catapulted higher, over the 30 Dollar mark, Sheryl Sandberg sold stock last week at 28 Dollars. Something about diversifying, I guess that rings true for me. But this was a strange announcement from Facebook, quite simply it said "Come and see what we are building". The BusinessInsider has a few views on what it could be: Here Are All The Rumors About What Facebook Will Announce At Its Mysterious Jan. 15 Event. A phone? Maybe. I suspect some sort of communication software. The stock was up 5 and a quarter percent last evening to 30.59 Dollars. It is still down 19.5 percent since listing.

Facebook announced something different last evening. Here it is from the horse's mouth: Announcing the Social Jobs App. What is it? Well, this is the app that helps users connect with roughly 1.7 million job offerings. The Social Jobs Partnership or SJP will "make it easier for people on Facebook to find and share employment opportunities." I must say that this was perhaps a long time coming. The only downside I can see is that if you are mates with your boss on Facebook, how do you keep this a secret? I am tuned into the LinkedIn stream which suggests so and so added new skills or even better upgraded to a fully paid service. That kind of hints to me that someone is more than putting themselves out there.