Thursday, July 26, 2012

Facebook and Mobile

Today, Facebook's stocks declined by almost 10% after its disappointed earnings were announced. Revenue growth moderated to 32% and investment related cost surged.


Remember, this is a $60Billion company with a very high valuations. I expect to see its stocks to drop further until this company can accelerate its growth above the current level. While Facebook ads revenue on its main website started to gain momentum, the ads revenue on its mobile platform still at an infancy stage.


It would be critical for Facebook to gain its grip on mobile ads as that is where the revenue pool is going to shift to.


“Mobile is a huge opportunity for Facebook,”  “Our goal is to connect everyone in the world. And over the next five years, we expect 4 or 5 billion people to have smartphones. That’s more than twice as many people as have computers today.” Zuckerberg said.


Read more: http://www.bloomberg.com/news/2012-07-26/facebook-sales-top-analysts-estimates-as-ad-spending-gains.html

1 comment:

Paolo said...

On top yesterday's drop, Facebook lost additional 11 p.p. today (27th of July).
I agree with you that mobile advertising will boost Facebook's stock price, but I think that this will take time.

Facebook is still struggling in getting customers using the mobile platform; therefore, to boost and facilitate this transition, Facebook will renounce for at least other months in introducing advertising in the mobile application. As a result, I won't expect a jump in the stock's price within the next year