In Mark Zuckerberg’s interview at Disrupt yesterday, he said several things that Facebook investors should find encouraging.
Most importantly, he suggested that:
- Facebook’s mobile opportunity is much bigger than people think
- Facebook is going to go into the search business
- Everyone is now “underestimating” Facebook
One of the big concerns about Facebook is that, as its users migrate to mobile, the company’s ability to monetize the users will drop precipitously, thus clobbering Facebook’s revenue. Zuckerberg said explicitly, for the first time, that he thinks Facebook will ultimately make money money per user on mobile than it makes on the desktop. If this proves true–and, importantly, if it happens because mobile revenue per user soars instead of desktop revenue collapsing–Facebook’s revenue growth should soon reaccelerate and then stay strong for years.
Zuckerberg also said that search is a huge opportunity for the company and that Facebook is “uniquely positioned” to go after it. A few weeks ago, we suggested that Facebook could quickly generate an incremental $3 billion of revenue if it jumped into the search business. If Facebook really does aggressively go after the search opportunity, therefore, this could create a major new growth engine.
Lastly, Zuckerberg made several comments about how everyone is now “underestimating” Facebook. Reading between the lines, this is encouraging both for the near-term and the long-term. With respect to the near-term, Zuckerberg knows exactly how Facebook is doing this quarter, and we suspect he would have been very hesitant to use the word “underestimating” i! f Facebo ok were likely to blow the quarter. Longer term, the word choice suggests that Facebook thinks investors are, in fact, underestimating Facebook’s revenue potential.
Now, of course, none of this changes the fact that Facebook’s stock is still expensive (~30X next year’s estimated earnings), which means the market is counting on revenue reaccelerating this quarter and remaining strong for the next several quarters. And none of it changes the concern that, in October and November, employee lock-up releases will likely lead to additional insider selling–possibly a lot of it.
But it does suggest that a new bull story for Facebook could start to emerge.
SEE ALSO: Dear Facebook Employees: Here’s The Truth About Your Stock Price
Here’s what a few smart Wall Street analysts had to say about Zuckerberg’s remarks:
BEN SCHACHTER, MACQUERIE:
- We thought his comments regarding search over the longer-term were the most noteworthy of the presentation and will drive more discussion about a potential search revenue stream for FB while reigniting some concern about increased competition for GOOG
1) FB’s long-term focus: Nothing new here, but FB is clearly focused on the long-term and creating value over next three-fiveyears.
2) Mobile – Clearly wanted to publically highlight his belief that mobile is fundamentally good for FB. He discussed a number of interesting notions:
– mobile is absolutely the key and focus for the company! span>
– on mobile they see more engagement and time spent per user versus desktop, mobile users more likely to be DAU’s and twice as likely to use it six out of seven days a week.
– over time, he believes that they can make more money per mobile time spent than desktop
– new iOS app already seeing much improved engagement
– over time, thinks that mobile monetization is more tv-like than desktop.
– mobile ads performing better than desktop already and new product on the way, highlighted a few times that mobile is a “huge opportunity”
– have made mistakes on mobile. Most notably, too early a focus on HTML 5 as opposed to native apps. Correcting that now, though he did note that currently more time spent on mobile web FB than on apps.
– talked about recent product for mobile app installs. (developers/publishers pay for an install) – not a full public launch, but testing. – intersection of platform and distribution…
4) Search - Perhaps the most notable comments of the presentation were in regards to search and their long-term view that FB has unique assets to help answer questions.
– already doing 1 billion search queries per day (and not even trying).
– most searches are to find other people, but many! also fo r pages/brands and apps.
– stated that search represents a “big opportunity” and that search is one obvious thing they could do in the future.
– there is already a team working on search, but wouldn’t say how big or clarify if it is doing anything beyond the current search functionality. However, we thought his search comments were the most interesting of the presentation and that he clearly thinks that FB and its social graph are uniquely positioned to improve search in the future.
5) FB phone/hardware – Strongly stated that a FB phone is the wrong strategy and wouldn‘t move the needle. Wants to be on all phones…
7) FB’s mission - Reiterated the long term mission is to connect everyone on the planet and make the world more open and connected. Stated that making money goes hand in hand with this mission and that they need to do both in order to do either.
8) Company morale – When asked about company morale, stated that stock price doesn’t help, but focused on the fact that FB has always been controversial and that there is cyclicality in terms of how people think about FB. Right now seems to be on the downside, but he likes that, as he thinks it is when people underestimate the company.
– When they are underestimated, it gives them latitude to take big bets.
DOUG ANMUTH, BARCLAYS
Positive comments on Mobile. Zuckerberg indicated that ! Facebook and its mobile potential are being underestimated. Mobile users are spending more time per person on Facebook than desktop users and are 2x as likely to use Facebook in 6 of the past 7 days (L6/7). We also believe mobile DAUs are likely higher than web DAUs. In terms of mobile monetization, Zuckerberg indicated that Facebook can make more money from a mobile user per time spent than a desktop user, and that mobile ads in their early days are already performing better than ads on the right rail of the desktop. As published in our recent Facebook report from 9/4/12, we estimate Facebook’s mobile ad revenue could be more than $200M this year and above $900M in 2013 driven by higher CTRs and CPMs. Our analysis also suggests mobile ad revenue/user/month could ultimately be higher than on the web as higher engagement and pricing offset the lower number of impressions per visit. See page 2 for our proprietary model, which segments Facebook’s ad business into Mobile SS, Web SS, and Web Marketplace.
Search on Facebook’s radar. Facebook currently generates ~1B search queries a day—the majority attributed to people search, but also a meaningful portion related to brand pages and apps. In late August Facebook launched Sponsored Results—ads displayed in the search dropdown bar—to capitalize on this opportunity. However, Zuckerberg indicated that Facebook could do more with search in terms of providing users with direct answers to their questions, likely based on information derived from the social graph. This is likely more headline risk for Google than a real, near-term fundamental concern, but the two companies could ultimately overlap more in search down the line.
BOB PECK, CO-RISE
1) He’s working on Open Graph – this is very impt as it is the! revenue optty I’ve cited (subscription services, app center, gaming). This is a big part of the potential revenues / upside
2) Search is impt and they are working on it. Once again, this can be very lucrative if done correctly. New revs.
3) the reason they are behind on mobile was a wrong bet on technology. They bet heavily on Html5 and it was a mistake, their mobile apps can be better when native (ie integrated with apple / android)
4) he’s very focused on mobile and realizes how impt it is. Interestingly, he thinks it monetizes better than desktop.
5) no phone – and I agree with his view they don’t need one
6) he alluded to a model where developers pay for app install as part of app center – once again, impt new revs
– he explained how buying it sped up development of its platform and improved user experience
8) lastly, he seemed more poised than usually and that isn’t easy given the stock performance
9) also, I like the continued focus on the long term (much like Jeff Bezos
10) I was disappointed that there was no discussion about the insider selling….
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John Herrman over at Buzzfeed FWD astutely points out that all of the flaws of cameraphones (noisy sensors, poor focus abilities, artifacting, etc.) are being exposed now that we have large screens (both in size and resolution to display our images on). Going forward, is this enough of a reason to make you go back to carrying a proper, standalone camera? [FWD]
Bokeh refers to blurry effects in photographs—purposely out of focus shapes that are creamy and wonderfully fuzzy. You can make your own bokeh with just some inexpensive black cardstock.
This DIY lens hood and cap, dubbed the Circle of Confusion Shape Modifier, is similar to a previous one we’ve featured before, except this one lets you change out the “slides” or bokeh shapes easily—so you’re not stuck with just one shape. The tutorial at DIYphotography is very detailed: It tells you how to set up the grid in Photoshop or Gimp, create the squares and cutouts, and assemble it all together.
Check out the original article and the reader comments for a discussion of the techniques used to create the effects in the photos, such as setting your camera to the lowest aperture value. Enjoy making dazzling, beautiful photos!
DIY: Circle of Confusion Shape Modifier | DIY Photography
ComScore released its annual US Digital Future in Focus report this week, offering a year-end wrap of many of the trends its tracked throughout the past year and a look towards the next. One of the more telling stats concerns email use among those in their teens and twenties. According to the report, web-based email use among 12-17 year olds dropped 31 percent in the past year, while use among those 18 to 24 saw an even bigger drop of 34 percent. Some of that can no doubt be attributed to Facebook and other email alternatives, but a big factor is the growth of email use on mobile devices; both of those age groups saw double-digit growth in that respect, with mobile email use jumping 32 percent among 18 to 24 year olds.
In terms of sheer growth in the past couple of years, though, there’s not much that matches the trajectory of tablets (obviously aided by one in particular). ComScore notes that that US tablet sales over the past two years have topped 40 million, a figure that it took smartphones as a category a full seven years to reach. Another area that saw some considerable growth in 2011 is digital downloads and subscriptions (including e-books), which jumped 26 percent compared to the previous year, leading all other areas of e-commerce. The full report and some videos of the highlights can be found at the source link below.
Continue reading ComScore report finds drastic shift from web-based to mobile email among younger users in past year
ComScore r! eport fi nds drastic shift from web-based to mobile email among younger users in past year originally appeared on Engadget on Sat, 11 Feb 2012 13:12:00 EDT. Please see our terms for use of feeds.
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Looking for a zoom booster to flesh out your NEX or MFT kit? Then take a highly magnified gander at Kenko Tokina’s 400mm f/8 mirror lens, which now comes with both E- and T-mounts to complement the manufacturer’s existing SLR-compatible range. So long as you don’t mind the light-sapping aperture and manual focus, you’ll be able pick one up in Japan tomorrow for a price that should soon become apparent. Just bear in mind that other new MFT options from Tamron and Astrodesign are likely on their way too.
Kenko Tokina 400mm lens for Micro Four Thirds and Sony NEX hits Japan tomorrow originally appeared on Engadget on Thu, 02 Feb 2012 12:54:00 EDT. Please see our terms for use of feeds.
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Ready for a bevy of more exotic-sounding codenames
from AMD? Well, have a seat, as the maker of everyone’s favorite APUs just revealed its roadmap extending through 2013. And folks, it’s quite the doozy. But before we delve into its technical intricacies (which you’ll find tucked after the break), we’ll begin with some general takeaways. Per CEO Rory Read
, 2012 and 2013 are “all about execution,” with the company girding itself for the the next “inflection point” where it’ll excel. The key to this strategy, as he describes it, is to continue marching towards a full-SoC
design that will cover a host of devices running the gamut from mainstream laptops to tablets and so-called Ultrathins
, the company’s forthcoming answer to Intel’s Ultrabook onslaught.
During its announcement, timed to coincide with AMD’s annual financial analyst day, the company also stressed its unique position wedged between Chipzilla and makers of ARM chips. Ask Read and he’ll tell you that’s a key advantage f! or AMD, that its CPU and GPU IP will bring more value through a better overall experience in the market. That’s a strategy less obsessed with raw specs and sheer speed and more focused on a holistic package. Senior VP Lisa Su said AMD will aggressively enter the tablet arena this year in a big way, reiterating that AMD-based Windows 8 slates are indeed en route, though she stopped short of giving an ETA. Finally, the company’s renewing its focus in the server market, as it seeks to cut a larger slice of the cloud computing pie. That’s AMD’s 2012 / 2013 plans in a nutshell, but if you’re the kind of person who likes a few technical specifics (and who doesn’t, really?) meet us after the break for a peek at what’s in store.
Continue reading AMD reveals its 2012-2013 roadmap, promises 28nm chips across the board by 2013
AMD reveals its 2012-2013 roadmap, promises 28nm chips across the board by 2013 originally appeared on Engadget on Thu, 02 Feb 2012 14:54:00 EDT. Please see our terms for use of feeds.
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NYC opening its first public high school dedicated to software engineering originally appeared on Engadget on Tue, 17 Jan 2012 04:44:00 EDT. Please see our terms for use of feeds.
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drag2share – drag and drop RSS news items on your email contacts to share (click SEE DEMO)
Color us surprised, but word on the street is that Monster
and Beats By Dr. Dre
are soon going to be a thing of the past. After years of pumping out fashion-forward, bass and treble pumping headphones that (debatably) changed the landscape of personal audio products — and spawned a slew of imitators
— both companies have reportedly decided not to renew their five-year contract. Businessweek
notes that two sources have confirmed that disagreements over “revenue share” and “who deserved the most credit for the line’s success” stemmed the decision between the companies — not surprisingly, Beats Electronics wanted more of both.
In the the followup, Monster will pump eight new headphone lineups featuring due out this year, Monster is also noted to have brought in 60% of its own revenue from Beats by Dre, and now plans to shift its focus on older demographics, such as executive types, which the brand never exactly catered to. Notably, Businessweek also states that Beats Electronics will retain to the rights to the headphone’s iconic design, sound-signature and branding. Considering Beats’ partnerships reign far with companies like HP and HTC, things probably won’t be all doom and gloom for the company — but the amount of time left to pick up your very own JustBeats likely just got slim. Hit up the source link below for more details.
Monster and Beats Electronics discontinue partnership, audiophiles rejoice originally appeared on Engadget on Thu, 12 Jan 2012 20:04:00 EDT. Please see our terms for use of feeds.
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