Facebook 4th Quarter 2013 Earnings Highlights And Social Media Mobile Economics

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We’re All social media mobile users now:

Facebook showed the world yesterday growing revenue via social media isn’t a problem if the right business model is implemented and focuses on mobile penetration. This week the company posted better than expected results for the fourth quarter of 2013 that exceeded Wall Street expectations with revenue rising $1 billion from the prior year.  Revenue increased from $1.59 billion to $2.59 billion and was up 14 cents per share from 17 to 31 cents which was much higher than the 25 cents analysts were predicting.  I’ve been partial to the social media sector and concerns about teenage user growth took a backseat to its broad user base and rising mobile revenue.

A recent ‘study’ from Princeton University predicts Facebook will lose 80 percent of its users in 2015. The model had several holes too large to fill here and the estimate seems more than farfetched and borders on ridiculous. Facebook shot down the assumptions used in the model with a humorous article here called “Debunking Princeton”. Daily active Facebook users were up 49 percent to 559 million much to the chagrin of the NJ ivory tower.

Facebook is not only a prosperous social media company but a growing mobile advertising network and Instagram which boasts over 150 million users has yet to show its true value.

Facebook has only begun to show the power of its platform. Growth outside the U.S. could continue to add value per share and new ad mechanisms such as video are likely to improve its advertising model along with the associated additional marginal revenue per mobile user. The world is becoming increasingly mobile and Facebook is poised to take advantage of global growth and a more flat world. It’s simple social media mobile economics…..

Betting against Facebook may have been a good idea several months ago after a seemingly botched IPO but based on the 2013 fourth quarter report, it might be a better gamble to pick a team in the Super Bowl this weekend.  There’s no academic knowledge required.

For the record, I’m going with Manning but the number one rated defense has a high likelihood of winning.

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