The Comeback Phase:
Magical Figure: Facebook Inc (NASDAQ:FB) achieved the magical numbers of 1 billion monthly active users, the only social networking company to achieve this. The biggest asset for any social networking company is the number of users it can attract, and Facebook did outperform its competitors by a huge number in this regards.
Commercialization: After a long wait, Facebook finally started to commercialize and add more revenue generation options. The humongous database acted as a beneficial option in attracting many brands.
Mobile Advertising: The technology world has rapidly shifted from desktops to smartphones. This means that advertisers need to target the new audience in a smarter way. Facebook did lag behind the others in terms of developing its mobile platform for advertisers. But better late than never, they have developed the tools for advertisers to market their products on the smartphones. This did help in convincing its shareholders, thus resulting in a boost in its share prices.
What’s Next in Store?
Facebook Inc (NASDAQ:FB) can expect tough competition from Google’s Google Plus, the social networking website. Though it has not gained much popularity since its release it is slowly and steadily gaining numbers, which can be alarming for Facebook. Not only that, Google is its biggest rival in display ads. It is expected that Google will beat Facebook in terms of market share of display ads.
The other company they need to keep an eye on is Linkedin Corporation (NYSE:LNKD). The primary difference between them is that LinkedIn specializes with networking people in professional occupations. This attracts a different segment of customers to it. Though Facebook Inc (NASDAQ:FB) did introduce Glassdoor services in order to compete with LinkedIn, LinkedIn still holds the edge in this segment. The other important thing is that LinkedIn is able to generate revenue of $1.30 for every hour a user spends on their site. This displays a more stable future and generates more investor confidence.
Facebook is currently trading at around $31, an increase of 16 percent over the last month. They are showing positive signs in terms of revenue growth and mobile advertisements. The Q4 results are expected to come in on Jan. 30. There are positive vibes coming from these results, and thus many investors are laying their hands on the stock at the current comparatively lower prices. Can Facebook sustain this upswing? Or is it just the heat of the moment (anticipation for the quarterly results)?
The article Facebook’s Roller Coaster Ride originally appeared on Fool.com.
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