Facebook flying! Monetizing mobile, what's the problem?

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.


But hey, that is history. Now the company has 699 million active daily users. 142 million in Canada and the US, 182 million in Europe and 181 million in Asia. Of course that excludes China, although some folks do get around "the firewall". 195 million in the rest of the world, that includes us down here in "the Africa". Which is not one place, but that depends on where you live. The active monthly users number jumps to 1.155 billion people, mostly made up of developing market folks. And get this, mobile users, on a daily basis number 469 million people. 7 percent of the worlds population use Facebook daily on their mobile devices. I can't think of too many other companies that have that reach.


How are their sales split up? Mostly advertising really, not much of a split at all! And the top line grew 53 percent when compared to the comparable quarter a year ago. That is some serious growth! Mobile ad revenue now accounts for 41 percent of the total, not bad for a business that was going to be able to do it. I am being totally facetious of course.

So what now? Expected earnings are around 50 cents for the full year. At a 30 odd Dollars share price that is still wildly expensive. But earnings are expected to be around a dollar in two years time, so the bottom line is growing really quickly. And until users become irritated with the advertising propositions, the company knows more about their users than anyone else. They know your likes, your family members, where you live, your age, your marital status, whether you have kids, in what city you live, where you live and so on. More than your high school headmaster knew about you. Or knows about you.


Make no mistake, as an investment it has many risks, including valuations. Something different. But more than 1 in seven people worldwide use the service and more continue to sign up. The service goes to our very core as people, communication with one another. Forget the pictures of dogs and cats, motivational quotes, your food, your kids, their kids, your view and your holiday. The advertisers want you. They need you. You just need to like them! The database applications are endless. I like this company a lot. The earnings will come. For the time being it is the biggest smallest revenue most talked about company in the world. For its size. It trades on a price to sales of double that of Google. I like both of them!