Tag Archive: Facebook
The market awarded Facebook a 25 percent share price spike today, following a strong earnings report that showed off the company’s ability to retain mind share among youths, build its total global usership, and monetize mobile traffic better than nearly any other company. Period.
The firm pop in its shares has pushed Facebook’s valuation past the $80 billion mark, where it currently rests at $80.21 billion. Not a bad day’s work, but that number is somewhat shadowed by the fact that, as a company, Facebook has torched tens of billions of dollars of shareholder equity since it first went public.
We draw two conclusions from that fact: Given that Facebook is now a tremendously stronger company than it was a year ago, and yet it is valued under its former price, a pox on our own house for overpaying for the company’s shares; and, naturally, that Facebook is more than another strong quarter away from being simply flat.
Here’s TechCrunch’s Josh Constine and Kim-Mai Cutler the day before the fateful, and botched, IPO:
Facebook shares will start trading at $38 tomorrow, the company confirmed in a release, giving it a valuation of $104.12 billion. Facebook and its early shareholders will raise just over $16 billion in tomorrow’s much anticipated IPO.
At a $104 billion valuation, Facebook is worth more than any other tech IPO candidate at the time of its offering. It also perfectly matches what Facebook shares have been trading at in secondary markets over the last several months. Google was worth $23 billion at the time of its very unusual Dutch auction IPO back in 2004. As of tomorrow Facebook will be worth about half of what Google is worth now.
The implicit point in the second paragraph is that if Google managed to so greatly grow its valuation compared to its IPO price, to what heights might Facebook race? Despite general market furor, Facebook popped but a nibble to $42 a share on its first day, and then declined rapidly enough that its banking partners held the line at its initially offered price.
To illustrate just how off the market was concerning the pricing and sale of Facebook stock, here’s the same set of TechCrunch writers during its first day as a public company:
While the price is going to fluctuate a lot today, there’s a crowdsourced bet from Twitter users on FacebookIPOClosingPrice.com that the company will close at a $54 price and a $135.7 billion valuation.
Nope, Twitter users, that wasn’t the case. In fact, those shorting Facebook made out the best.
The gap between $104 billion and roughly $80 billion is $24 billion. But that’s not even the least-kind way we could describe Facebook’s total decline from former heights. Facebook opened on its first day at $42.05, meaning that it was worth more than $104 billion; those who bought in at that price would have enjoyed a far heavier decline in the value of their stock if they held onto it.
But, in effect, this is our fault. The Facebook IPO price, as noted in the first blocked quote above, matched secondary market interest. The market bore Facebook at a $38-per-share price; the IPO went off, hitches aside.
Christopher Hitchens once said that the ironies of history occur most pungently to those that don’t believe in them, and that applies greatly to us in the technology industry. We have undergone a number of periods in which valuations of technology companies have gotten far ahead of their earnings. Again and again we have bought into our own hype only to watch the money of the average Joe evaporate as founders and investors pocket cash at IPO prices. That’s fine. It’s simple market capitalism. But you’d think we would have learned a bit by now.
Facebook as a financial entity is much stronger than it was during the quarter it went public. Let’s do a little comparison for fun [Facebook Q2 2012 financial data versus Q2 2013 financial data]:
- Revenue, Q2 2012: $1.18 billion
- Revenue, Q2 2013: $1.81 billion
- Net income, Q2 2012: -$157 million
- Net income, Q2 2013: $333 million
Aside from higher expenses and a lower operating margin, it’s hard to find a metric by which Facebook is worse off than it was a year ago. And yet we the market public value the firm at $24 billion less than on its first day.
We were out of our skulls in 2012, and we are still paying for it. That said, Facebook is damn killing it recently, and is slowly growing into the valuation that its bankers and investors found palatable four quarters ago.
New question: Is Facebook overvalued at its current $80 billion price? The comments are yours.
Top Image Credit: Steve Snodgrass
Facebook stunned yesterday with its report that mobile advertising represented 41 percent of its total ad revenue in the second quarter of 2013. In the first quarter of 2013, it totaled a then-hailed 30 percent, bumping that key ratio by more than a third in just a fourth of a year. On a dollar basis, Facebook’s mobile advertising grew more than four times as much as its desktop-sourced advertising incomes in the most recent quarter.
However, looking backwards, last quarter’s mobile ad growth is less astounding when placed into context. From the third to fourth quarter of 2012, Facebook juiced its ad revenue as a percentage of total ad income by 9 percent. From the last quarter of 2012 to the first quarter of 2013, growth was 7 percent. Taking into account the 11 percent gain reported yesterday, Facebook has averaged 9 percent growth in its mobile ad revenue as a component of its larger ad top line for the past few quarters.
This allows us the ability to make basic predictions. Facebook yesterday noted on its earnings call that mobile advertising revenues will eventually outstrip desktop ad income. But when? Well, we can predict. If mobile advertising revenues continue at their average rate of the past few quarters, Facebook should earn precisely as much from desktop and mobile advertising platforms in the current quarter.
The math is simple: Facebook ended the most recent quarter with a 41/59 split between mobile and desktop ad income. If mobile revenues are growing by 9 percent quarterly – again, on average – 41 and 9 make 50, leaving the remaining 50 percent for desktop ad revenues.
Adding another 9 percent to Facebook’s mobile ad revenue as a percentage of its total ad income, and we could wrap the year where the second quarter finished, but in reverse, with mobile revenues comprising 59 percent of total ad income, and desktop just 41 percent.
This feels, prima facie, optimistic. Are we being too generous?
There is always a risk in any form of prediction, as future market dynamics are outside of our vision, and will always remain so. That said, we can take mild refuge in the fact that our average rate of mobile ad growth, again as a percentage of Facebook’s total advertising top line, is under the most recent quarter’s rise; this means that we are anticipating Facebook to under-perform its most recent quarter moving forward.
This gives us some breathing room in our predictions. Here’s the chart:
If mobile revenue is so strong, where does that leave desktop advertising incomes? Well, as it turns out, Facebook’s desktop advertising business is all but not growing. We can deduce this by subtracting the percentage of Facebook’s mobile ad revenue from its total advertising income, leaving us with its desktop-sourced figure. Let’s have some fun:
- Facebook’s total advertising revenue was $1.25 billion in the first quarter of 2013. Of that, 30 percent came from mobile. That means 70 percent came from desktop sources. Seventy percent of $1.25 billion is $875 million.
- Facebook’s total advertising revenue was $1.60 billion in the second quarter of 2013. Of that, 41 percent came from mobile. That means 59 percent came from desktop sources. Fifty-nine of $1.60 billion is $944 million.
- $944 million – $875 million = $69 million. That, assuming that Facebook has its numbers in place, is the delta between Q1 and Q2 for Facebook’s desktop advertising business.
That’s not much. Not only is Facebook sourcing a growing percentage of its revenue from mobile platforms, but its revenue growth is increasingly coming from a smartphone near you.
Let’s get to the bottom of the final number: In dollar figures, how much did Facebook’s mobile ad revenue grow from the first to second quarter? I’m glad you asked. Let’s find out:
- Facebook’s total advertising revenue was $1.25 billion in the first quarter of 2013. Of that, 30 percent came from mobile. Thirty percent of $1.25 billion is $375 million.
- Facebook’s total advertising revenue was $1.60 billion in the second quarter of 2013. Of that, 41 percent came from mobile. Forty-one percent of $1.60 billion is $656 million.
- $656 million – $375 million = $282 million.
So, Facebook’s mobile revenue grew by a quarter billion dollars in the second quarter. Not bad, given that as a percentage gain it works out to around 75 percent. And, perhaps more importantly, the $282 million figure is more than four times our previous $69 million sum. Therefore, mobile ad revenues on a dollar basis grew four times as fast as desktop advertising incomes in the most recent quarter.
Top Image Credit: Randy Lemoine
After several months of testing within the industry, Nielsen is finally ready to reveal its efforts to bake mobile viewing habits into its TV ratings system. In a wider roll-out of what the company already monitors, it’ll launch an SDK for participating broadcasters in mid-November that will encompass both old-fashioned screens and those not-so-new upstarts (including DVRs, internet-connected TVs, tablets, smartphones and browsers). To work out which stream is being watched where, Nielsen will parse together “big data and a census-style measurement approach.” This will apparently match demographic information through social networks, mentioning Facebook explicitly – the ratings monitor is already involved with Twitter. It’ll also know exactly which device viewers are watching content on thanks to “audio watermarks, metadata or tags associated with the content and related advertising.”
Read the full story at Engadget.
Angry Birds Friends crashes onto Apple and Android devices, Thursday May 2. Fans of Facebook games might already be familiar with the social version of Rovio’s Angry Birds, as it appeared as a Facebook app last year.
Play against your friends in a competitive version of Angry Birds with a familiar style of gameplay fans have come to love. Rovio added a series of power ups designed to give Angry Birds Friends a bit of variation from the original games. However, all of your favorite birds return from previous titles, with the exception of the Mighty Eagle.
In game social currency is called Bird Coins and you earn them from defeating your friends in four different competitive modes. It is also believed that more Bird Coins can be bought through micro-transactions in app.
Get Angry Birds Friends this week at the Apple App Store and all Android App retailers and join your friends in bird flinging fun.
Zuck bought Facebook its fanciest new outfit in many years this week, and naturally, the New News Feed is getting all the swooning. But FB added a handful of delicate tweaks and turns to the site—some you might not have noticed yet.
It makes sense to toss in little changes in the shadow of a giant one. Some of them make sense given the news feed shakeup. Others are just augmentations the team slid in without noticing. Many are good. Some are not. Here’s a guide to all that’s new and (mostly) improved.
The words you read on Facebook look different now. Helvetica. All over the place. According to Facebook Product Designer Vivian Wang, the typographical shift is part of Facebook’s strategy to be more consistent. Your statuses should look the same whether you read them on a phone, tablet, or browser, and with the Helveticafication of Facebook, there’s a “consistent voice” no matter what device you’re using. And voice is neutral—Helvetica is beloved for being both brilliant and inoffensive, which is why you’ll see it everywhere from the NYC Subway and the Space Shuttle. And now, Facebook. This was probably inevitable.
FB also added some old fashioned styling to its revamped article sharing—if you toss in a link, the headline will be displayed in large point Georgia—a typeface that’s very, very close to Times New Roman, and carries a lot of its gravitas. Zuck said he wanted the feed to be more like a newspaper, and here’s how.
The controversial Ticker—that live feed of everything our friends clicked, liked, and shared, as it happened—has been beaten within an inch of its life, and stuffed into an insultingly small box in the bottom left of the page, where no one will even think to look for it. It only shows one item at a time, and completely blends into your IM buddy list, so really, it might as well not be there at all. Wang said the Ticker is now “more of a peripheral feed,” which seems appropriately euphemistic for a funeral. She was quick to point to the “Most Recent” category of the revamped New News Feed, which Facebook says is now your best bet for perma-stalking your friends.
Don’t be surprised when the ticker vanishes completely. You probably won’t even notice.
New profile pictures
Hey, did [__________] change her profile picture? I love those glasses, don’t you? George looks handsome, too. And now they’ve got their own little rectangle in the Photos News Feed, highlighting their most recent vanity changes.
This is so tiny, and so lovely. If there’s a new story on a feed you’re currently reading, you’ll get a gentle bubble reminder. Click it, and you’ll be taken to the top.
Entirely trivial, but slightly charming. When you like something, the little thumb briefly bounces, just like in the mobile app. I’m sure some group of PhDs decided that would make people click things more often, because we’re animals that like to see little things bounce around.
A great deal of Facebook has been stripped down and stuffed into the lefthand sidebar. What happens if you don’t have the screen real estate to fit that and everything else? Just make your browser window smaller, and the bar shrinks to an icon-only view, saving a great swath of pixels.
Friend lists? Hello? Bueller?
Sorting our Facebook buddies into categories we care more or less about seemed like a neat way of sorting signal from noise, given how many worthless people we’re friends with these days. But how do we edit these lists now? The old buttons and menus that let you edit your social silos seem completely gone—I was only able to find an editing option by jumping through a bunch of outdated articles in the Facebook Help section. It’s here, if you want it.
Notice any others? Show ’em off below.
User Manual is Gizmodo’s guide to digital etiquette and internet intelligence. It appears as if by magic every Friday.
The British police officers that raided Ian Driscoll’s Tewkesbury home found the mortar they were looking for. They just didn’t expect it to be plastic. Or a model.
“The Action Man looked a bit like me, so I decided to put it as my Facebook picture,” Driscoll, who makes models for a living, explained to the Daily Mail. “I didn’t even notice the mortar in the background.” But someone else did and promply reported him to authorities.
Not to be accused of being soft on gun crime, the police obtained a search warrant and sent officers round to Driscoll’s home to investigate. Five vans-worth of police—armed with real guns—apparently without bothering to actually look at the photo. Otherwise, they’d probably have noticed that the mortar in question is just slightly larger than an action figure and roughly as long as the remote control also pictured.
“It’s tiny and quite clearly a toy. I can’t stop laughing. I think it’s hilarious,” Driscoll said. The raiding officers were understandably chagrined at the mix-up but defend their response.
According to Gloucestershire police spokesman Alexa Collicott,
The information was given to us in good faith and we acted with good intentions. We are sure that the community would rather we acted quickly on information given to us of this nature, in case it had turned out to be a weapon. The officers attending were hugely relieved that it wasn’t anything more sinister and we would much rather have a result like this than to put the public in harm’s way by not taking action.
Or, you know, perform a bit of “police work” before sending in the brute squad.
[Daily Mail via CNet – Image: Chris Matyszczyk / CNet]