But what about those expenses, you ask? At this stage in Facebook’s business life, not using its positive operating income and $2.38 billion in cash to invest in new technologies, people, and revenue opportunities would be a concern. And Facebook has several recent, or pending, introductions that should have mid-term investors feeling good.
By now, you’ve probably heard about Facebook’s new gift card, in addition to its Gifts service. Are these game-changers? No, but finding more ways to expand Facebook offerings, generate revenues, and engage users are positives in the long run. And let’s not forget what Zuckerberg called his “new pillar of our ecosystem” on Facebook’s recent conference call — its new Graph Search. That, too, will take time before it begins making an impact on Facebook’s bottom line, but that’s to be expected, not dismissed.
Perhaps the most immediate impact will be made by the 10 new games, all targeting the hardcore Call of Duty-type gamer crowd, expected later this year. The action-game industry offers a ton of potential; Call of Duty alone finished 2012 by surpassing $3 billion in sales. Facebook’s partnership with social-media game maker Zynga Inc (NASDAQ:ZNGA), with its Farmville and similar middle-of-the-road games, is fine, but action is where the revenue is. Keep a close eye on these new games as they roll out this year.
Now that 2012 is behind us, it’s time to look forward. And if you’re a mid-term investor in search of a solid growth opportunity, Facebook still looks pretty darn good.
The article Why Investors Weren’t Impressed With Facebook’s Results originally appeared on Fool.com and is written by Tim Brugger.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Facebook.
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