FB - Facebook

[rb]

It's a temporary blip...they are saying that higher security spending will decrease net margins...revenues will still be growing quite rapidly.  Within two years, margins will rebound as they probably won't be spending as much on security upgrades.  Of the FAANG stocks, Apple and Facebook are the only ones trading at a reasonable price.  Cheers!

 

AGREED!

I disagree. This is not a one time cleanup. The new costs are fixed costs and rebase costs at a higher level.

 

What you guys are talking about is that if revenues continue to grow then margins will grow again as operational leverage does it's thing. This bit I agree with. But if revenue is to continue to grow it probably would have grown anyway. With the new costs even if the margins will increase in the future they will still be lower then they would have been otherwise.

 

I agree with FB's decision to do this btw.

[Spekulatius]

It's a temporary blip...they are saying that higher security spending will decrease net margins...revenues will still be growing quite rapidly.  Within two years, margins will rebound as they probably won't be spending as much on security upgrades.  Of the FAANG stocks, Apple and Facebook are the only ones trading at a reasonable price.  Cheers!

 

AGREED!

I disagree. This is not a one time cleanup. The new costs are fixed costs and rebase costs at a higher level.

 

What you guys are talking about is that if revenues continue to grow then margins will grow again as operational leverage does it's thing. This bit I agree with. But if revenue is to continue to grow it probably would have grown anyway. With the new costs even if the margins will increase in the future they will still be lower then they would have been otherwise.

 

I agree with FB's decision to do this btw.

 

I think sooner or later, the security will be automated for the most part. A large part of their AI drive may go in this direction, It’s a few billion dollar of annual expenses and I am fairly sure, that AI sooner or later can do this better and faster than any human can.

[sleepydragon]

I just think FB’s moat is not deep at all. Look at MySpace. Disappeared. A few years from now difficult to say  can say if people will still be using Facebook or something else.

[compoundvalue]

I really like the fact that they are tackling this aggressively. I think that every dollar spent on safety and security now is a dollar well spent. It seems to me like they’re dead serious in addressing the issues without paying too much attention to the next quarter financials. That is the right thing to do and I hope they stick to it. With respect to FB’s moat, I think that they have an incredible moat. I  think that Google and Facebook have in advertising a competitive position similar to the one Visa and Mastercard have in payments. The network effect could be duplicated to other arenas outside of advertising (including payments...). And I think that the more regulated it gets the more entrenched they become

[Spekulatius]

I just think FB’s moat is not deep at all. Look at MySpace. Disappeared. A few years from now difficult to say  can say if people will still be using Facebook or something else.

 

I don’t think that MySpace ever had the same scale, depth and advertising tech and scale that FB had. MySpace was a first mover in the social media space,  but they didn’t have any depth other than some scale. FB does have that and in a way, you could say that the FB property itself is just the front for the advertising machine behind it. you can see FB management thinking along the same lines, because they use the same engine and apply it to Instagram and most likely whatever they want to monetize next.

 

The same can be said  about GOOG. Before GOOG, there was Altavista, which was delivering the best search experience,  it there was no ecosystem (Adsense etc) behind it to fuel further improvements.

[walt373]

Seems like Myspace's failure is a permanent fixture in the minds of investors and has probably kept FB cheaper than it should've been during its entire existence.

[Shooter MacGavin]

Seems like Myspace's failure is a permanent fixture in the minds of investors and has probably kept FB cheaper than it should've been during its entire existence.

 

Don't forget friendster..the poor man's myspace.

[Liberty]

Seems like Myspace's failure is a permanent fixture in the minds of investors and has probably kept FB cheaper than it should've been during its entire existence.

 

Don't forget friendster..the poor man's myspace.

 

How is Orkut doing these days?

[Jurgis]

Seems like Myspace's failure is a permanent fixture in the minds of investors and has probably kept FB cheaper than it should've been during its entire existence.

 

Don't forget friendster..the poor man's myspace.

 

How is Orkut doing these days?

 

Google+?

 

[fuluvu]

I really like the fact that they are tackling this aggressively. I think that every dollar spent on safety and security now is a dollar well spent. It seems to me like they’re dead serious in addressing the issues without paying too much attention to the next quarter financials. That is the right thing to do and I hope they stick to it. With respect to FB’s moat, I think that they have an incredible moat. I  think that Google and Facebook have in advertising a competitive position similar to the one Visa and Mastercard have in payments. The network effect could be duplicated to other arenas outside of advertising (including payments...). And I think that the more regulated it gets the more entrenched they become

 

The digital evolution is still in its infancy. FB's capitalization is large, but it is still a very young company. it just grows fast. It has its growing pains. The privacy is one of them. The billions spend to addressing the problem will makes FB stronger and its moat wider. Scarifying short term profit to strengthen its business is good for the business long term.

[winjitsu]

Myspace had 76mm MAU at its PEAK. Orkut 300mm. Facebook has 2.23bn  8)

 

The value of a network grow exponentially with with its size (or so the VC's say :)) If you believe this, Facebook is WAY harder to kill than any of their past competitors.

[Gregmal]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

[Pauly]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

Didn't Google assume the same thing with Google+ ?

[winjitsu]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

I don't see how this could happen. The other half of the world's phones are Android. This works with apple music and video since these are individual activities, but when we're talking about connecting with you friends, I can't see a network that leaves out half the population working.

[Gregmal]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

Didn't Google assume the same thing with Google+ ?

 

Google doesn't own mobile the way Apple does. Apple puts millions of devices in people's hands every day. People live on their phones. Two totally different companies in this regard.

[Gregmal]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

I don't see how this could happen. The other half of the world's phones are Android. This works with apple music and video since these are individual activities, but when we're talking about connecting with you friends, I can't see a network that leaves out half the population working.

 

It doesn't need to have everybody all at once. All I'm saying is that Apple could very easily do something like this and you can't say it wouldn't effect FB. I've heard of people ditching their current phones for Iphones simply because they want  to be able to Imessage with their friends. Having an AAPL social media network would throw a huge wrench into the equation for FB. I mean it's kind of silly even to say there is a moat when the bottom line is that there have been numerous instances of companies posing threats to FB. WHatsApp and Instagram to name a few. FB just happened to be smart enough to buy them.

[Pauly]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

Didn't Google assume the same thing with Google+ ?

 

Google doesn't own mobile the way Apple does. Apple puts millions of devices in people's hands every day. People live on their phones. Two totally different companies in this regard.

 

Right, Apple is not an advertising company the way FB and Google are. So why would they pour resources into building a competing social network when they would then need to either sell ads (a very un-Apple thing to do), or just lose money on the whole venture (another un-Apple thing to do) and just hope they can convert enough people to iPhones to make it worth while. Could happen, but unseating a massive competitor like FB would definitely be expensive and definitely wouldn't be 'easy'.

 

I like Apple's strategy of giving users more control over their privacy since it chokes off FB's life blood, and burnishes Apple's reputation as a friend of the end user rather than an exploiter.

 

 

 

[Shooter MacGavin]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

Didn't Google assume the same thing with Google+ ?

 

Google doesn't own mobile the way Apple does. Apple puts millions of devices in people's hands every day. People live on their phones. Two totally different companies in this regard.

 

Not in the US, but globally Android has larger market share of smartphone O/S.   

[Guest longinvestor]

I don't know if there is some secret pact or not, but Apple could very easily launch a social media ecosystem through it's platform. Integrate this through IOS. They already have Imessage, photos, Itunes, etc, all they'd need to do is seam them together. Not to mention you get rid of all the "issues" people have with FB in terms of advertising and data collecting. This is why I don't really believe FB has much of a moat. There aren't many companies that can disrupt them; I agree. But Apple could do it very easily.

 

Didn't Google assume the same thing with Google+ ?

 

Google doesn't own mobile the way Apple does. Apple puts millions of devices in people's hands every day. People live on their phones. Two totally different companies in this regard.

 

Right, Apple is not an advertising company the way FB and Google are. So why would they pour resources into building a competing social network when they would then need to either sell ads (a very un-Apple thing to do), or just lose money on the whole venture (another un-Apple thing to do) and just hope they can convert enough people to iPhones to make it worth while. Could happen, but unseating a massive competitor like FB would definitely be expensive and definitely wouldn't be 'easy'.

 

I like Apple's strategy of giving users more control over their privacy since it chokes off FB's life blood, and burnishes Apple's reputation as a friend of the end user rather than an exploiter.

 

+1

 

I believe that this to be a real opportunity for Apple. One can throw in Microsoft in their corner. As AB 375, the California version of GDPR, gets firmed up, expect this to be in the menu of topics. For starters, Apple could make it a simple opt-in check box for data sharing on their ecosystem. That would hurt FB and GOOG. While reading up on how AB375 came into place, this simple checkbox opt-in has apparently been a mortal fear. Apple can make it happen.

[JayGatsby]

Their moat is just that they're the incumbent and everyone is on it. Building a knockoff facebook is easy, it's getting everyone with internet to be on it that's difficult.

[Lakesider]

Anyone else think their product is just getting worse and worse?

 

Its basically just a stream of ads to your face. when they changed from personal pages to a news stream type system I was gone.

[Parsad]

I just think FB’s moat is not deep at all. Look at MySpace. Disappeared. A few years from now difficult to say  can say if people will still be using Facebook or something else.

 

If you use that logic then Amazon's moat is about as strong as Overstock's.  MySpace had a peak user base of 75M...Facebook has 2.5B users and Instagram has over 800M and is still growing rapidly.  Cheers!

[compoundvalue]

I think that Instagram has more than 1bn users actually...

[Liberty]

I think that Instagram has more than 1bn users actually...

 

Yep

 

https://techcrunch.com/2018/06/20/instagram-1-billion-users/

[Shooter MacGavin]

I just think FB’s moat is not deep at all. Look at MySpace. Disappeared. A few years from now difficult to say  can say if people will still be using Facebook or something else.

 

 

 

If you use that logic then Amazon's moat is about as strong as Overstock's.  MySpace had a peak user base of 75M...Facebook has 2.5B users and Instagram has over 800M and is still growing rapidly.  Cheers!

 

 

Facebook's moat isn't impregnable, but it's at least been stress tested. Orkut, Google Plus, Snapchat, Pinterest, Twitter plus a handful of others.

 

It's not enough to have a ton of users.  Look at Yahoo!.  Yahoo had 900M daily visitors before it got sold to VZ/Aol and they didn't know how to make a profit on it with display advertising.  Their ad product sucked and they didn't have the know how to harvest the data and make it effective.