If there is a single company that can still make waves, effectively bucking off the recent earnings malaise in the tech industry, it would be a safe bet to think that Facebook is the one who can break the mold. There has been much for the company to be proud of in recent months. They grew quite a lot over the last fiscal quarter, especially in mobile platforms, which was unexpected to some industry insiders. It is also relevant to note that they have relatively untapped sources of revenue in terms of the messaging as well as virtual reality platforms. Unlike many other tech moguls, the company has even managed to avoid the condemning attention of Donald Trump.
All the while, Facebook has been coming up on its four-year anniversary as a publicly traded company, and there are reasons that we can assume that Facebook’s doing so well in terms of the stock market might help them push even higher. Many expect a joyous day when they announce the first quarter results this Friday.
Theyanalysts that polled Faceset expect adjustments earnings of 63 cents a share, which is up 48% from the year prior, to $5.3 billion dollars. Facebook has thus exceeded its quarterly estimates all but one time since their initial public offering in the wee morning of 2012.
Facebook has gone through a revolution, nay a transformation in regards to its mobility and that revolution has been a meaningful one to say the least. To put this into perspective, about 80% of advertising money in the last quarter came from its mobile means. That is up from a year ago when it made up a mere 28%. When you think of Facebook’s average revenue per user, you think of a surge of about 33% during the last year. This is an upward trajectory, that made Facebook earn big green: more than $1 billion in net income in the fourth quarter alone.
The stability of the Facebook economy is in direct correlation to the strength of the economy in general. They are not so much a generator, as they are a indicator of financial prosperity at a given time and place. What I mean is that, Facebook can only really make money through the sale of their ad space. They do not create, nor do they really provide a service other than a platform of which most of the people in our economy are members, and thus allows for the largest platform for anyone to reach their potential clients when the economy does well.
Facebook does well because when people’s companies do well; they want to advertise them and thus pour their excess revenues into the Facebook machine. You take the ad revenues, you take away the life blood of Facebook and Zuckerberg in general. So the valuation of Facebook and its meteoric rise is a troubling one to say the least, because when they do have a down turn and the shareholders say they want to sell, there will be nothing for Facebook to do. They don’t do anything and our entire economy is based around giving these useless tech services absurdly high valuations on the basis that they are worth something much more than actually are.