Facebook Inc (NASDAQ: FB)’s 2012 net income was $53 million on revenue of $5.09 billion. It was considerably lower than the previous year numbers of $1 billion in net income on revenue of $3.7 billion, but there were significant one-time costs such as those related to going public.
Facebook has kept up with user needs by becoming more focused on mobile offerings. The number of monthly active mobile users increased by 57% percent to 680 million (out of 1.06 billion active monthly users overall). The company has kept up with this new trend by focusing on advertising revenue from mobile, including sponsored “messages.”
“Today, there’s no argument, Facebook is a mobile company,” Zuckerberg said during a conference call with financial analysts. “The next thing we’re going to do is get really good at building new mobile-first experiences.”
And then there is Groupon Inc (NASDAQ: GRPN). The ever baffling Groupon. I have not been quiet on my lack of love for this site. It is another example of making money without adding value. The site isn’t really a retailer or a reseller. It isn’t a manufacturer or producer. It isn’t a club or membership program. It isn’t an advertiser or service provider. So what is it? The best way I can explain it is that it is the carrot dangling before the horse, guiding the consumer to the products. It isn’t even the farmer driving the cart that holds the carrot in front of the horse (that would be the actual producers, manufacturers, retailers, etc.). It’s the carrot!
Sometimes the horse really wants that carrot, going after it with just a bit more gusto than before. Groupon has quietly and slowly raised itself up from its 52 week low. It isn’t anywhere near close to its 52 week high, but it has improved. But sooner or later the horse is going to figure out that it will never catch the carrot, so Groupon has worked hard to come up with new products and offerings. The new ventures into mobile shopping and payments just might save this company yet, as Groupon re-emerges not as the carrot, but as the farmer driving the cart. New products puts this company firmly into the “social media bubbles are really hard to predict” column.
There is no obvious, clear, impeachable theory about the social media bubble. It could burst. It could fizzle out. It may just stay right where it is, floating around, waiting for the wind to carry it away. But as the Motley Fool likes to say, don’t look at the short-term, look at the long. And in the case of social media stocks, ask yourself if you really expect the company to be around for the long-term, or better yet, if you see yourself returning to that site in the long-term.
The article Will the Social Media Bubble Burst? originally appeared on Fool.com and is written by and is written by Erin McBride.