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.
The Zuck said on the conference call last evening, when talking about the ten years of the company:
But what's ahead of us is even more exciting. Many of the successes of the past ten years have simply been steps on the path to achieving our long term vision of connecting everyone and improving the world through sharing. Over the coming months and years, you'll see us continue focusing on many of the same themes, but now with greater scale, ambition and resources.
OK, so the full year results of Facebook were released after the market closed last evening, you must have gathered that already. Revenue for the year grew to 7.9 billion Dollars, operating profit grew to 2.8 billion Dollars. Daily Facebook users grew by 139 million last year, to 757 million. Total users now stands at 1.23 billion. Wow. That was on average monthly growth of 172 million. In the month of December the number of users that were daily users was 62 percent. Daily mobile users outnumbers desktop users by 200 million. Wow. And ad revenue growth rates are expanding at a breakneck speed. Accelerating!
The stock, which is up like crazy pre the market, at around 60 Dollars a share is still expensive, make no mistake. They have ten billion Dollars worth of cash on hand, a lot less as a percentage when compared to the old tech companies. The market cap is a staggering 130 billion Dollars, closing in on one and a half a trillion Rand today. Yes, as the company opens, at around 60 Dollars, they will be worth that amount.
The main question, as ever, is Facebook still a buy at these levels? Analyst expectations are for the company to make 1 Dollar of earnings this year, you are paying 60 years worth of earnings to buy the company. But there are really quick growth rates, both top and bottom line, so perhaps many will be forgiven for thinking that they are paying too much. But this business could be almost anything, including an online retail platform dream, adverts everywhere selling stuff you actually want. We continue to hold, they are not for the faint hearted, volatility is likely to persist as studies who x or y or z scenario. The company continues to what what they know best, to connect friends and family, and to monetise their platform.