Facebook Earnings Preview
Never before have guys in suits and unabashed computer geeks cared so much about what’s cool.
Leading up to $FB earnings announcement after the bell, coolness seems to be all people can talk about. Investors worry whether the ten-year-old social network that started on Harvard’s campus is now too established to attract the early-adopter teens that helped build its business. The stock is in the red leading up to earnings.
Jan. 28 at 4:05 PM
Jan. 28 at 4:06 PM
Much of the concern stems from a report released this month from iStrategyLabs claiming teens are leaving Facebook by the millions. Facebook users between the ages of thirteen to seventeen have dropped 25.3% in the last three years, according to the report.
All the talk is annoying some cashtaggers.
Jan. 29 at 11:15 AM
Why do some punk kids matter for a social network has 728 million daily active users? Facebook made $736 million in the third quarter of 2013 and sold $2.02 Billion in advertising. The Street expects $0.29 EPS on $2.37 Billion in revenues for the fourth quarter, according to an Estimize.com survey of 98 analysts and investors.
The reason, of course, is MySpace. Once the most visited social networking site in the world, it steadily lost popularity as the teens went to Facebook. It’s valuation plummeted. NewsCorp spent $580 million for the company in 2005. Justin Timberlake and Specific Media bought it last year for $35 million. Good luck bringing sexy back there JT.
But Facebook isn’t MySpace. It innovates faster thanks, in part, to a belief in open source software and quick decision making. And, perhaps above all, MySpace didn’t buy a company allowing users to quickly post and glam up pictures.
Last year, Facebook bought Instagram for $1 Billion. The acquisition for a startup without reported profits made many people say “huh?” It’s not like Facebook needs to buy users…. at least not yet.
But CEO Mark Zuckerberg tipped his hand at the time that it the purchase wasn’t just about sharing photos on Facebook. It was about mobile. Facebook mobile users increased 45% last quarter from the comparable quarter a year ago. That is the largest growth segment by percentage.
Cashtaggers will be on the look out for how Facebook is making money off of Instagram and using it to improve the mobile experience. As well as how Facebook is progressing with video advertising.
Jan. 29 at 1:06 AM
~ Catherine Holahan (@cholahan)
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