Is There Anything That Facebook Cannot Do?

By: ispeculatornew
Date posted: 06.10.2011 (5:00 am) | Write a Comment  (0 Comments)

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So far, no one has told me to stop raving about Facebook which explains why I have continued to pump up the stock is a huge bargain despite what many call its “bubble like” $70B market cap on the secondary markets. Following the big success of LinkedIn’s (LNKD) IPO, rumors are that Facebook might go public earlier than expected. What does seem certain though is that Facebook is taking on a whole lot of new projects and it’s unclear if anyone can stop them. Facebook is clearly the most “powerful” company in Silicon Valley these days and it has been using that influence to jump into many new sectors. Some of its more recent moves are not convincing yet but I wouldn’t call them failures either. For example, while many expected Facebook credits to become a serious competitor to Paypal, I would say that it’s not been convincing yet. Sure, Facebook Credits are very new and they are being used on many of Facebook’s apps, they have not yet gone to that next level yet.

The Next Big Steps?

Facebook has been very vocal in its belief that when given the choice between consuming almost anything with friends or doing it alone, most people prefer to do it socially. They have thus decided to use their social network as a platform for music, tv shows and books among other things. How so? One way is a recent alliance between Facebook and Spotify. Basically, it will become possible for Facebook users to listen to music on the network, share it with friends, discuss it, etc. Can it work? I would say there’s at least a possibility that Facebook could become a serious player. As for movies and books, I’m not convinced yet how these would be integrated since most people usually watch moves on their tv. A company like Netflix thus seems much better positioned to be a streaming leader. But would I discount Facebook? Obviously not.

The Place Where Facebook Will Start Making Big Bucks

The one area where Facebook is sure to make some decent revenues and profits in the near future is the “corporate pages”. Companies like Pepsi, Coca-Cola, and so many others that advertise their Facebook page heavily are doing a great job at getting consumers involved on these pages. There are many different things that Facebook could do in that area. First of all, one thing that has been discussed is helping merchants sell merchandise through those stores. It would be done through Facebook Credits which would make the experience very smooth for consumers and very profitable for Facebook (which seems to take a standard 30% fee on credits). The company could also charge for additional visibility, features, etc. Can you imagine how much multinationals would be willing to pay for such services? I think it’s very significant.

Other Areas?

I think there are plenty of other opportunities as well such as expanded use of classifieds, deals (Groupon like), etc. These are all part of the reason why Facebook has grown. This not only is likely to keep up but I think it could accelerate in the coming years. Do you agree?

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