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

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!