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Facebook, Inc. (FB) Message Board

  • investora2z investora2z Sep 20, 2013 6:25 AM Flag

    SA article

    The upcoming IPO of Twitter is already drawing comparisons with Facebook. The IPO and the pricing will be debated, and there is likely to be a lot of hype surrounding the event. However, this is likely to be less compared to what happened with Facebook because there could be more caution in the air. The pricing is likely to be more accurate though it is difficult to value such companies. Most of the valuation is in the future potential. The investors are likely to be more cautious after the Facebook IPO. A seekingalpha article mentions that Goldman Sachs is going to be more cautious about the pricing of the IPO after the flak which Morgan Stanley received. The author compares Twitter and Facebook. Both are giants in the social media space, and have grown their user bases remarkably in a short period. Twitter has much less MAUs (100 million) compared to the massive 1.1 billion of Facebook, but both generate a majority of their revenues from ads. Facebook has already shown signs of success at monetizing its mobile user base, and more will be known about Twitter later. The sentiments about Facebook changed recently after the quarterly results showed a remarkable performance on this front. The article mentions that increasing focus on native advertising is likely to drive future growth of both companies. Native advertising is believed to have huge growth huge potential. However, future success in this segment is not going to be too easy, as advertisers are going to Social media ad networks for such services. For example IZEA (IZEA), a pioneer in native advertising, runs a number of these marketplaces, and the number of advertisers are using them to arrange native ad publishing. Hence, social media companies may need to acquire some of these smaller companies, and also diversify to focus on other emerging segments.

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