FB - Facebook

[sleepydragon]

In the town i live, we have a 5000-people town Facebook page. Someone posted detailed instructions of disabling FB platforms and Ads under profile settings. I did that, and probably many others too.

[LongTermView]

Thread:

 

 

Thanks for the link, Liberty. Michael's twitter thread does a good job explaining why it is in the best interest of Facebook to keep user data private.

[LounginMKL]

In the town i live, we have a 5000-people town Facebook page. Someone posted detailed instructions of disabling FB platforms and Ads under profile settings. I did that, and probably many others too.

 

Sleepydragon- may I ask what's the alternative? I guess a town of 5k already has a pretty tightly knitted network where they don't need online organization as much?

 

I live in the Bay Area, where people use FB to form groups around hobbies, seeking roomates, seeking jobs, etc... It's basically Craigslist, but with identities. When you are interacting with someone, s/he is not just an email address, but someone with a social network to vouch for their existence.

 

Of course, we could be living in a bubble where my experience is an exception...

[DTEJD1997]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

 

[cameronfen]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

 

The only people that are saying "I've got to get on the Facebook and be more active" are in India.  Everyone in the developed country has Facebook if they want it.  I'm not surprised you don't see any growth where ever you live.  That doesn't mean growth isn't happening. 

[Spekulatius]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

i haven’t seen any difference on how my circle uses FB. I am a low frequency user myself, but it is hard to replace for what it is. If you delete your Fb account years ago, you are obviously not a representative user. I dont think the community here represents the average FB user well.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

[DTEJD1997]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

 

The only people that are saying "I've got to get on the Facebook and be more active" are in India.  Everyone in the developed country has Facebook if they want it.  I'm not surprised you don't see any growth where ever you live.  That doesn't mean growth isn't happening.

 

You very well may be right...

 

And not to be rude...but I am going to guess that the average FB user in the "West" is going to be worth orders of magnitude more in advertising & revenue than the average FB user in India or other 3rd world countries.

 

So what is this growth in India really worth?

[Liberty]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

 

The only people that are saying "I've got to get on the Facebook and be more active" are in India.  Everyone in the developed country has Facebook if they want it.  I'm not surprised you don't see any growth where ever you live.  That doesn't mean growth isn't happening.

 

You very well may be right...

 

And not to be rude...but I am going to guess that the average FB user in the "West" is going to be worth orders of magnitude more in advertising & revenue than the average FB user in India or other 3rd world countries.

 

So what is this growth in India really worth?

 

There's a slide each quarter showing the ARPUs around the world. But the idea is to skate where the puck is going. And as they say, at some point a big enough quantitative difference makes a qualitative difference... There are so many users outside of NA and Europe that even at lower ARPUs they add up to a lot, and since there's a lot of room for growth left in ARPUs and in unconnected users (millions join the internet every month still), that's runway.

[cameronfen]

Hey all:

 

The hits just keep coming for FB.

 

I don't think there is any question that these scandals are bad and have damaged FB.

 

The question is how much damage and will it be permanent.

 

I got rid of my Facebook account YEARS ago.

 

A few years from now, you could see new competitors gains strength, and/or people start to drift away from it.

 

Most of the people that I am close to have NO FB account, OR it is dormant, OR it is low usage for them.  Obviously not everybody, just most of the people I am close to.  Nobody I know is saying, "I've got to get on the Facebook, and be more active!".  The few people I hear discussing it, are mainly discussing it in a negative fashion.

 

The only people that are saying "I've got to get on the Facebook and be more active" are in India.  Everyone in the developed country has Facebook if they want it.  I'm not surprised you don't see any growth where ever you live.  That doesn't mean growth isn't happening.

 

You very well may be right...

 

And not to be rude...but I am going to guess that the average FB user in the "West" is going to be worth orders of magnitude more in advertising & revenue than the average FB user in India or other 3rd world countries.

 

So what is this growth in India really worth?

 

There's a slide each quarter showing the ARPUs around the world. But the idea is to skate where the puck is going. And as they say, at some point a big enough quantitative difference makes a qualitative difference... There are so many users outside of NA and Europe that even at lower ARPUs they add up to a lot, and since there's a lot of room for growth left in ARPUs and in unconnected users (millions join the internet every month still), that's runway.

 

To second Liberty, ARPU is indeed low in India, but India is growing at 7% a year.  Just like in the BRICs how you could bet on multinational US companies or big local companies to copy their US playbook in foriegn locals and expect the rising tide of GDP to do the work for you, you can do the same thing with Facebook in India.  ARPU is $2.5 versus $26 in North America and somewhat concerning $8.50 in Europe.  Facebook also is the dominant player in India but only has 280 million MAU versus the population of 1.3 billion.  You may view low ARPU as a negative, but I consider that to be a huge asset which will allow future price increases. 

[cameronfen]

Additionally, I think another hidden asset is Whatsup.  Whatsapp has more than 1.5 billion MAU and if you layer on top the 1 billion MAU on messenger (some people have both so you can't just add them) thats a huge portion of the Earths population on these OTT apps.  Most of Whatsapps users are in developing coutries/continents like India, Africa, South America where penetration still has room to grow and ARPU does as well.  Whatsapp is not being seriously monetized right now, which is the right move in my mind.  It's more important to get as many users as possible to create an network effect which no other firm can disrupt.  This will mean no other OTT firms will be able to compete with Whatsapp as everyone is on Whatsapp so no one will want to leave as they will lose all their contacts. 

 

However, it really isn't a question of if FB will monetize Whatsapp its when.  Why?  Because Tencent has already demonstrated the correct way to monetize this asset with their ecosystem around Wechat.  Tencent is a 500 billion dollar company built entirely around the ecosystem of Wechat and Whatsapp has 50% more users than Tencent in many countries with lower penetration and development than China.  So when FB chooses to monetize wechat (as they are starting to roll out) they copy Tencent's playbook.  Offer payment, ads, stickers, ride hailing and games all through the Whatsapp ecosystem.  The reason Wechat is such a money making machine is because you can do everything on it.  And because you can do everything on it, whenever a new idea comes up in China (like say Uber), Tencent has an inborn advantage over everyone else, because everyone is already spending all there time on the Wechat ecosystem doing everything else and they just put one more product up.  In 2015 HSBC estimated Wechat to be worth 80 billion and half of Tencents then market cap.  Now Tencent has a valuation of 500 billion with much of the growth driven by Wechat monitization.  Facebook is already starting to execute Tencents' playbook by hiring Tencent management and implementing payments and upgrades for small businesses for example. 

[Liberty]

Zuckerberg interview with Ezra Klein:

 

https://overcast.fm/+F_9F-g8iA

[Jerry Capital]

Attack of the micro brands.

 

Pretty easy for me to see a "buy now with one click button" that is now off-patent from Amazon integrated with hyper targeted advertising generating some interesting sales on the instagram platform.

 

https://medium.com/positiveslope/attack-of-the-micro-brands-c0b7835c3633

[Liberty]

Transcript of Zuckerberg's press conference yesterday:

 

https://newsroom.fb.com/news/2018/04/hard-questions-protecting-peoples-information/

[vinod1]

I have been dead wrong about Facebook. I was wrong even about the reasons why I was wrong about Facebook. So take my comments with a pinch of salt.

 

I believed that people would be concerned about privacy and some random event would at some point bring this to the forefront for for the people. And that this would slowly reduce what people share on social media. This in turn would limit Facebook potential.

 

What the recent episode Cambridge Analytica in fact shows is that people dont give a whit about privacy. If "Donald Trump" was not part of this, this would have received very little attention of the public. So sort of like the Financial Crisis which sort of stress tested the moat of Moody's, this event provides a good stress test of Facebook's moat.

 

It looks like FB would end up with an even stronger moat as a consequence of this episode.

 

Vinod

 

[rishig]

I have been dead wrong about Facebook. I was wrong even about the reasons why I was wrong about Facebook.

 

Can you provide more context on these two statements. I am curious to hear why you say this.

[vinod1]

I have been dead wrong about Facebook. I was wrong even about the reasons why I was wrong about Facebook.

 

Can you provide more context on these two statements. I am curious to hear why you say this.

 

It would take several pages to explain my errors but I would hit the highlights.

 

To me the three key drivers/risks of Facebook are:

 

1. User engagement. How much its users enagage with FB in terms of minutes spent on the site.

You probably are aware of Skinner's Operating Conditioning model and how powerful it is when combined with a variable rewards that is common feature to many of the social media apps. I understood this but still underestimated its addictive power. The expected decline in user engagement never came.

 

2. User willingness to keep sharing their personal information.

It is amazing how much personal information people were willing to share on FB. The proliferation of FB likes buttons and using FB login as an identify mechanism across the web was way beyond what I expected.

 

3. User tolerance for advertisements on FB.

 

I expected there would be a greater resistance to advertisements from its user base. On google your intent is clear and ads that are relevant enhance the user experience. On FB I thought ads would be a tough sell and that many companies would pull back on the ads as they would be effective. On Mobile I expected this to be even worse.

 

But we now know that ads are very effective and mobile is tailor made for FB and the rocket engine on which to deploy its moat.

 

So overall I could not have been more wrong about the company.

 

Vinod

[vinod1]

On an slightly off topic note, the hunter gathers never had this constant stimuli of a mobile app like Facebook. So humans have not evolved to handle such stimuli well. So we behave like the lab rats in this experiment (replace the lever with Facebook app):

 

https://www.huffingtonpost.com/david-j-linden/compass-pleasure_b_890342.html

 

In the 1930s, the psychologist B. F. Skinner devised the operant conditioning chamber, or “Skinner box,” in which a lever press by an animal triggered either a reinforcing stimulus, such as delivery of food or water, or a punishing stimulus, such as a painful foot shock. Rats placed in a Skinner box will rapidly learn to press a lever for a food reward and to avoid pressing a lever that delivers the shock.

 

In the 1950s, the psychologists James Olds and Peter Milner modified the chamber so that a lever press would deliver direct brain stimulation through deep implanted electrodes. What resulted was perhaps the most dramatic experiment in the history of behavioral neuroscience: Rats would press the lever as many as 7,000 times per hour to stimulate their brains. This was a pleasure center, a reward circuit, the activation of which was much more powerful than any natural stimulus.

 

A series of subsequent experiments revealed that rats preferred pleasure circuit stimulation to food (even when they were hungry) and water (even when they were thirsty). Self-stimulating male rats would ignore a female in heat and would repeatedly cross foot-shock-delivering floor grids to reach the lever. Female rats would abandon their newborn nursing pups to continually press the lever. Some rats would self-stimulate as often as 2000 times per hour for 24 hours, to the exclusion of all other activities. They had to be unhooked from the apparatus to prevent death by self-starvation. Pressing that lever became their entire world.

 

Vinod

 

 

 

[Jurgis]

(replace the lever with Facebook app CoBF)

 

There. Corrected that for you.  8)

[LongTermView]

3. User tolerance for advertisements on FB.

 

I expected there would be a greater resistance to advertisements from its user base. On google your intent is clear and ads that are relevant enhance the user experience. On FB I thought ads would be a tough sell and that many companies would pull back on the ads as they would be effective. On Mobile I expected this to be even worse.

 

But we now know that ads are very effective and mobile is tailor made for FB and the rocket engine on which to deploy its moat.

 

I like the ads because the targeting is effective. Knowing that I'm a hiking and running enthusiast, FB shows me enjoyable ads related to these activities. This makes the experience much better than tv where annoying and off-topic ads are all over the place.

[Spekulatius]

Call me a convert since I never owned FB until recently. If you believe that thr FB thesis is intact (I don’t see a reason why not), FB stock from a fundamental analysis POV is actually cheaper than it has ever been and relatively cheap compared to the market, if you consider growth potential and fundamentals.

 

It feels surprising to write this, as I found the stock ridiculously valued at the IPO, but they have proven themselves and churned  out numbers that make the current price look cheap.

[chrispy]

Everyone is upset but no one I've talked to is closing their account

[gjangal]

Does anyone know if they disclose the split between FB, Instagram and their Facebook Audience network in terms of growth rates.

 

I think everyone is talking about how ad load on FB is saturated. i wonder if that includes the facebook audience network.

[Jerry Capital]

You mean revenue growth split?

[LR1400]

Call me a convert since I never owned FB until recently. If you believe that thr FB thesis is intact (I don’t see a reason why not), FB stock from a fundamental analysis POV is actually cheaper than it has ever been and relatively cheap compared to the market, if you consider growth potential and fundamentals.

 

It feels surprising to write this, as I found the stock ridiculously valued at the IPO, but they have proven themselves and churned  out numbers that make the current price look cheap.

 

I tend to agree. I don’t own it and never looked at it until recently, but the numbers are fascinating. It’s a much better business than 90% of other businesses.

[siddharth18]

Call me a convert since I never owned FB until recently. If you believe that thr FB thesis is intact (I don’t see a reason why not), FB stock from a fundamental analysis POV is actually cheaper than it has ever been and relatively cheap compared to the market, if you consider growth potential and fundamentals.

 

It feels surprising to write this, as I found the stock ridiculously valued at the IPO, but they have proven themselves and churned  out numbers that make the current price look cheap.

 

I think that's a respectable point of view. Changing your opinion as the facts change is a sign of wisdom. A pre-IPO investor in FB recently posted on Twitter that the valuation right now is the most attractive he's seen (in terms of risk/reward) ever since he invested.