May 16 2013

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Facebook a name that brings pleasure and shame to some of it members literally brings tears to some of its investors. The joy Facebook brings is tempered with the bungling of it's Initial Public Offering or IPO. The reason most people bought the stock was the opportunity for growth that exist with this company. That is to say a company worth 300 million could double or triple, or more into a one billion or 1.5 billion dollar company, offering its investors a double or triple on their money. Growth is Facebook's appeal. Where facebook accomplish its success was on the desktop with advertising placed off to the side of the page. With almost a billion members and double the eyeballs, the opportunity was and is gargantuan. Billions of dollars will be made by Facebook year after year with many years ahead of it . Additionally, that opportunity extends to you and I as investor and stockholders. However like time, technology waits for no man, not even Mark Zuckerberg, Facebook's founder, CEO and number one stockholder. Even so, the opportunity did not fail it simply changed as people migrated from mostly desktop computing to mobile computing, leaving Facebook without a mobile presence.

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In the investing community this was a crisis. Most Investor are financial type risk takers who need a sense of how things will unfold so they can take positiions or educated guesses. Without a technological solution they were left without vision and only saw an unpalatable end. Still with this doom portended this company kept coining revenue. Which, still grew however slower and slower. Still, today facebook is a $5 billion dollar company and will eclipse 6 billion in revenue this very year. So Facebook in 2009 did $1.3 billion dollars in revenue. In 2012 Facebook did $5.069 billion. That is to say early investor virtually quadrupled their money. I think this oportunity still exist for Facebook and its investors. So the story is still one of growth.

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The value of facebook is no doubt in its future potential for growth and one may ask is that growth happening now? How then might we know if that time of growth is here and now. This is the $64 billion dollar question.

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The answer is inside Facebooks ivory tower. As I mentioned earlier, the migration from the destop to the mobie platform gave Facebook its imperitive to master the mobile platform. That is to say, start generating advertising revenues where it is clear the migration is headed. In other words start minting money on the fast moving mobile monorail. The good news is the monorails ribbons has been cut and the monorail is moving. I said the mobile monorail is moving to the tune of 30% of Facebook's revenues last quarter. That was $1.48 billion or $339 million in mobile revenues. Therefore, we can see that Facebook and Zuck is working it out.

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THE SEXY BITCH AT FACEBOOK

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Advertising revenue is Facebook's sexy bitch and that being the case mobile is her hotrod. To extrapolate, with current revenue attributed to mobile of $339 million we would need a doubling or more of that number to a octupling. That is how we can see if the future is here. An excellent mile mark is $1 billion dollars in mobile revenue, with 30% growth forecasted.

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The road ahead maybe fraught with pitfalls but navigation is the key. A key to which Facebook recently announced it is in talks to buy WAZE Inc. An Israeli navigation , analytics concern that will help in its quest to master mobile. Already, Facebook has introduced a new and exciting product called: Custom Audiences. That is the ability to deliver the right message, to the right people, at just the right time. And This was the holy grail of digital advertising and marketing. This would allow advertisers to see exactly what they were buying with each advertising dollar and the deliver of, the goods would be reciprocated with higher advertising revenue for facebook and its investoers.

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Let's say then that there was a celtics game at the TD Garden, 40 Thousand in attendance. How much would a local restaurant, just a little furture away from this treasure trove of a crowd pay to entice said fans to patronize its restuarant at the end of the game. How much would taxi companies pay to give rides to fans hotel. How many fans would take that offer. Answer more than enough to fill said establishments or taxi cabs many times over. Any business owner that would not take that offer for advertising is a fulhouse short of a complete deck. And the grail , that holy thing is within Facebook's grasp. The only question that now remains is can Facebook deliver.

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So with mobile at 30% of revenue what guidance can management give in the coming quarters. It all depends on execution. Facebook must execute it s plans swifty and with complete adroitness. That my friend is mastery. Therefore if Facebook forecast revenue for 2014 and beyond above say $10 billion with additional growth of 25% to 40% the party is on.

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REVELATIONS OF THE LATEST QUARTER

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Mobile has grown form $0.00 in revenue in 2012 to 30% of revenue of the last quarter, reported in early May 2013. This is a most important developement because I believe it signals that Facebook is acquiring knowledge and proprietary deployment data leading to adroitness. The use of this skill will be tied in with the rumored talks that Facebook intends to acquire WAZE Inc. a crowdsourcing, navigation system and analytics concern, located in Israel. This potential acquisition would allow Facebook to further deploy aforementioned skills with the use of additional crowsourced technology and analytics. Furthermore revenue in Facebook continues to grow..

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The Sage