Facebook tops estimates

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:

Now having seen these results and with the benefit of hindsight, Facebook knew more than Fortune. In four quarters their number of daily mobile users have gone from 329 to 507 million users, I admit that I am one of those. But back to mobile. That is why there is Zuck and that is why there is Fortune magazine, with all due respect. I am not suggesting that an enduring brand, the publication first hit the news stands in 1930. So this is over 80 years old, whilst Facebook is zoning in on their first decade, having started in a dorm room. The parent company for Fortune is Time Warner inc., which has a market capitalisation of 63 billion Dollars. Facebook? 119 billion Dollars, nearly double.


Headlines I expect to see on Facebook, Fortune struggles to monetise their online offering. This is a case of new versus old, newer media forms where anyone can be an author with an ill informed dangerous opinions versus someone who has had their story overseen by an editor. That aside, and it is dangerous of course to believe everything that you read whether edited or not, you know the point I am trying to make. New media enables anyone to put their opinion across in a less formalised manner, sometimes with dire consequences, you know the old think before you speak.

OK, but to the results specifically. Here they are, you are able to peruse them, thanks to the wonder of the internet: Third Quarter 2013 Results. Q3 revenue when measured against the corresponding quarter last year increased 60 percent to 2.02 billion Dollars, topping that number for the very first time. Monthly active users registered 1.19 billion. Roughly 56.6 US cents per user per month. That sounds like next to nothing, if you think about it, the company generates not even 1 Dollar per user per month. OK, firstly, who are these users? Check, from the presentation (Quarterly Earnings Slides) that came with the results:

The growth in their numbers outside of the US and Europe has been pretty astonishing. In 24 months, the rest of the world Facebook users have doubled and some more. I am guessing that is people like ourselves. The number of Asian users has also nearly doubled in 24 months. These are daily active users of course, more interesting than the folks who are browsing by monthly, having a check. But what remains very important to me, anyhow, is that those users have not yet been monetised as aggressively as the one in the US. Check out this slide:

Revenue growth in the US has been huge, but their base was so much higher. I think that is what I am trying to get across. Think about Facebook from an advertisers point of view. I am not the best active user, but the company has a very good idea of who's posts I like. But some of my friends (yes, I have some) have long lists of their movie likes, their book likes, their TV series likes, their music likes, the businesses that they like and the list goes on. Facebook knows more about your activities than almost all other advertisers globally. If you change your status to engaged from in a relationship, that triggers a response for wedding photographers to advertise, you become a different audience.

What amazes me is that the Zuck thinks (at 29 years old) that his work is a long, long way away from being done, and that is reflected in the release: "(W)e're prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy." Be clear here, there is NO Facebook in North Korea.


After hours the price was wild, really wild, up a lot, and then off a lot from being up a lot. To basically around 2 percent up as we speak. Why? Because on the conference call the CFO said that teens were not that active users anymore, younger teens at that. Wow. Personally, the way I see it, the folks paying the bills and holding the credit cards are not the young teens. And more users globally will continue to adopt and advertise through these channels. I have not met a single person who has advertised on Facebook yet. Paul has however and he said the experience (for that specific corporation) was absolutely fabulous. Real time money exchange and real time money out with an amazing backend. So there you have it then. The platform is young. The users are still not that sophisticated. But the advertisers are adopting at a rapid rate. This is not for the faint hearted, trades on a crazy multiple and no doubt will take time to make serious money. It will.