Google Inc (GOOG), Yelp Inc (YELP): Facebook Inc (FB)’s New Goals

Page 1 of 2

When Mark Zuckerberg built “The Facebook Inc (NASDAQ:FB)” back in 2004, his goal was to “create a richer, faster way for people share information about what was going on around them.” Now, with over a billion people sharing their information freely, Zuck has a few new goals, which he revealed in the company’s most recent conference call: “connect everyone, understand the world, and help build the knowledge economy.”

Facebook Inc (NASDAQ:FB)

These are long-term goals, as Zuckerberg put it; these are the changes he wants to make in the world over the next 5 to12 years. This long-term outlook, which Zuckerberg and Facebook Inc (NASDAQ:FB) have seemingly always held, is what makes Facebook Inc (NASDAQ:FB) the kind of company worth a Foolish investment.

Connect everyone

There are currently only about 2.7 billion people with Internet access around the world. Even in the U.S., only about 80% of the population has access to the Internet.  That leaves a huge 4 billion person market for a company like Facebook Inc (NASDAQ:FB) to monetize.

In the last two years Facebook Inc (NASDAQ:FB) has made it easier and less expensive to access its service, particularly in developing countries. It launched its “Facebook Inc (NASDAQ:FB) for every phone,” which recently reported its 100 millionth user and contributed to significant earnings growth in Asia and the rest of the developing world. Additionally, Facebook is making deals with carriers to allow subscribers to use Facebook’s app and website without paying for data.

Internet growth is decelerating, and companies like Facebook and Google Inc (NASDAQ:GOOG) are working to ramp up the growth again. Google Inc (NASDAQ:GOOG), for its part, is full of interesting experiments to help increase access to the Internet and its services. For example, a network of blimps or balloons carrying wireless signals across Sub-Saharan Africa and Southeast Asia could connect approximately 1 billion people.

It’s no doubt that both Facebook and Google Inc (NASDAQ:GOOG) have a lot to gain from increased connectivity. The two advertising giants rely on scale to grow ad revenue. And while the next 5 billion Internet users will mostly come from the developing world, where ad rates are lower for both companies, it’s reasonable to expect rates to climb as those economies grow. In the meantime, scale will have to make up for lower rates. So, both in the near-term and long-term, there’s lots of growth left for these Internet advertisers in connecting the rest of the world.

Understand the world

With its 1 billion-plus active users, Facebook is gathering new information every second that can help it build up long-term knowledge about the world: people’s interests, favorite restaurants, good hotels. Unlike networks like Yelp Inc (NYSE:YELP), which specifically ask for user generated reviews, Facebook is gathering this information organically.

As this knowledge base grows, Facebook will become a bigger threat to networks like Yelp Inc (NYSE:YELP) and TripAdvisor as it develops new services that help users find the information they want. Graph Search was the first of such services, but is really only a starting point for Facebook. Zuckerberg believes his company “should be able to build intelligent services … that could answer lots of questions for you that no other service can.”

Last year, Yelp Inc (NYSE:YELP) generated $138 million off of its 86 million unique visitors (twelve month average)That number is expected to grow with the website’s audience, but the company’s margins will continue to feel pressure as new competition from both Facebook and Google encroach on its local business review market. As Yelp is just an advertising business, attracting a large audience is key. Both Facebook and Google have significantly larger audiences and the capabilities to make competitive products. I expect Facebook to move swiftly into this area, which should attract more advertisers and ad views.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!