Facebook fate of the conjecture: the next a the Yahoo Google (microblogging)? (Artesyn Technologies with map)

the the

IDG (Zhang) Beijing August 12, the technology website TechCrunch guest writer, private photo sharing service Sidebark company CEO David Cao (David Cho), today commented that Google and Yahoo on behalf of Facebook possible future direction of two destinies: heaven and hell. Due to the decline in user growth, market saturation and profitability to enhance difficult because, Facebook’s future fate may be more close to Yahoo instead of Google.

following article summary:

The

you think Facebook is much higher than the value of Yahoo? If you use Yahoo’s shares in exchange for 1 percent of Facebook shares, you are willing to come up with the number of Yahoo shares? 5%? 10%? Or more?

Google’s shares to replace it? You will use 1% of Google shares-for-one percent of Facebook shares? 1% with 0.5% of the shares of Google for Facebook shares how?

Let’s take a look at how the stock market to answer this question: in accordance with the market value of the Facebook market value is closer to Yahoo rather than Google. Facebook share price of $ 38 issued in May has been below $ 20 a market capitalization of $ 45 billion now, closer to $ 20 billion market value of Yahoo rather than Google’s $ 210 billion market capitalization.

Google and Yahoo, respectively, represent the possible future direction in Facebook two destinies. Google: the prosperity and development, and search for the king in the field of digital advertising giant, even second-rate product can also create billions of dollars in business. Yahoo: is shrinking, trying to find a new location, the CEO in exchange for to go, although the user base is still huge, but can not find the method to enhance profits.

for Facebook the two companies is basically heaven (Google) and hell (Yahoo) difference.

Today, according to the judgment of Wall Street, Facebook perilous, are approaching the edge of hell. Why is that? Wall Street is right or wrong? The more important problem is that Facebook can find a method of self-redemption?

in accordance with any standard point of view, Facebook is a great company. The number of users reached one billion, the most recent quarter revenue of $ 1.2 billion and a profit of $ three hundred million, with $ 10 billion in cash.

the stock market does not reflect the performance of the moment. The share price reflects the expected future performance of the investors for a company, especially such as Facebook’s growth prospects.

This is why even though Facebook recently results were in line with the previous outlook of the company is set, but stock still suffered a sharp decline due in part to The question now is, many analysts believe Facebook in the beautification of the related business figures. The stock price reflects expectations, and then when Facebook just reported in line with expected results, shares fell sharply.

So, we should expect Facebook multi substantial growth? There is no doubt that the next quarter, Facebook surpassed Yahoo (Yahoo’s second quarter 2012 revenue of $ 1.3 billion). But Facebook can eventually grow to the size of Google, Facebook scale 10 times?

to better analysis of Facebook’s growth potential, we will Facebook’s revenue breakdown of several indicators: the number of users, the composition of the users and each user average revenue (ARPU). Let’s turn the interpretation of these indicators.

1. the number of users. This is the most critical factors of a product, while Facebook is obviously poor performance in this regard. In the past three years, Facebook has an annual increase of users at around 250 million people, the dependence of these users of the site is gradually rising. Growth potential in the end how much? Facebook is the most mature market, the U.S. Facebook4 month, the number of users is only an increase of 5%. In many other markets, Facebook users to the point of saturation. While still some room for growth, but Facebook is soon to reach such a critical point: substantial growth driven by high-speed revenue growth will stabilize by the number of users.

2. users. Why to discuss the composition? This is because not all users are the same. An American user is greater than the value of an international user’s web users greater value than the value of the mobile users. However, Facebook users are increasingly migrating to the mobile platform, and the vast majority of subscriber growth from developing markets. These two factors will reduce the revenue impact of subscriber growth. In other words, even if the number of Facebook users are able to continue and even doubled, but revenue will not necessarily double.

3.ARPU. The determinants of this index is the business model, Facebook needs to continue to grow, towards heaven must be improved. ARPU is determined by two factors: Facebook can the extent to which the use of the advantages of scale and data to attract large-scale brand advertising funds, and Facebook in new revenue models such as pay and other fields can be successful.

first brand advertising. In attracting small and medium-sized enterprises and other so-called “pay attention to the actual performance of advertisers’ Facebook has done very well, but eventually decided to brand advertising business the success is the ability to attract brand giants such as General Motors, Procter & Gamble and AT & T, and other companies. These companies are now still on line to invest a lot of advertising dollars. Although the online advertising business, an annual increase of nearly $ 40 billion, but the line advertising (TV, print, radio, etc.) still have the $ 140 billion size of the market. Facebook’s scale will help it to attract these big brands, but this process will be very difficult.

to attract these brand advertisers, Facebook also need to make better use of user data, promote the growth of the advertisers ROI. We have already seen that Facebook is testing a “sponsored information” friends “like” behavior to the user’s mobile page insert advertising. I expect we will see more similar to the test, Facebook will be more use of user data in order to enhance the rate of return on investment.

factors affect ARPU is to look for other profitable channels. For Facebook, a lot of uncertainty. Facebook has been successful will be paid to the development of a meaningful source of revenue. Some experts recommend Facebook to enter the mobile space, it is hard light of these new business models to predict the growth of Facebook’s.

to summarize just analysis: user growth rate of decline, the user form adverse change, and the big question mark about ARPU. Short term, Facebook of course, will grow, but the future will go to hell or heaven still take quite some time to see it. To keep up with Google and find the road to qualify for heaven, Facebook must take radical measures to improve ROI for advertisers. However, in order to avoid the edge to hell, Facebook can not slaughter the hen that lays the golden eggs – the product of a high degree of user involvement – although overly aggressive use of user data may lead to the deterioration of the user experience. So far, Facebook done a good job in balancing user experience and profitability. But if I bet on Facebook’s future, I’d bet Facebook to hell.