JayGatsby Posted February 10, 2019 Share Posted February 10, 2019 User data isn't as important to google. If I search for "toyota truck" that's all the data they need to show me ads related to buying a toyota truck. Most of their ad products don't let you specify beyond that anyway. I was listening to a podcast yesterday where the guy said his customer acquisition cost on FB was up 4x over a few years ago. Just one piece of anecdata, but thought it was interesting. In his view the shotgun approach of targeting everyone on FB used to work, but now targeting is required. Not necessarily a bad thing. Most of what I see seems to support my view that prices are up, ad load is up, and user engagement is down. We'll see Maybe this comment belongs in the google thread, but user data is extremely important to any large tech company. Google even built android (and chrome) and offered them for free to collect more user data. Their search engine is built on user profiles and population behaviour. Basically you feed in you personal online behavior into a machine learning algorithm (likely a neural network) and it uses this to decide what links to put where. That's all built on training on billions of people and probably trillions and trillions of searches. Especially for big tech firms, data is absurdly valuable. Google Brain the AI unit of google has by itself justified all the costs of google X in history. Google X cost 3.5 billion this year alone. Without data Google Brain would be worth nothing. Isn't user data and population data pretty different? Facebook has every individual person, and monetizes that individual's data. Isn't Google primarily using population data that could easily be disconnected from the individual users? If website A has an average dwell time of 27 seconds and website B has an average dwell time of 48 seconds, website B is probably better. Is anyone trying to regulate that sort of broad population data? Google does do more targeted stuff with custom intent ads, youtube ads, etc, but I don't think it's as large of a percentage of revenue. Link to comment Share on other sites More sharing options...
cameronfen Posted February 10, 2019 Share Posted February 10, 2019 User data isn't as important to google. If I search for "toyota truck" that's all the data they need to show me ads related to buying a toyota truck. Most of their ad products don't let you specify beyond that anyway. I was listening to a podcast yesterday where the guy said his customer acquisition cost on FB was up 4x over a few years ago. Just one piece of anecdata, but thought it was interesting. In his view the shotgun approach of targeting everyone on FB used to work, but now targeting is required. Not necessarily a bad thing. Most of what I see seems to support my view that prices are up, ad load is up, and user engagement is down. We'll see Maybe this comment belongs in the google thread, but user data is extremely important to any large tech company. Google even built android (and chrome) and offered them for free to collect more user data. Their search engine is built on user profiles and population behaviour. Basically you feed in you personal online behavior into a machine learning algorithm (likely a neural network) and it uses this to decide what links to put where. That's all built on training on billions of people and probably trillions and trillions of searches. Especially for big tech firms, data is absurdly valuable. Google Brain the AI unit of google has by itself justified all the costs of google X in history. Google X cost 3.5 billion this year alone. Without data Google Brain would be worth nothing. Isn't user data and population data pretty different? Facebook has every individual person, and monetizes that individual's data. Isn't Google primarily using population data that could easily be disconnected from the individual users? If website A has an average dwell time of 27 seconds and website B has an average dwell time of 48 seconds, website B is probably better. Is anyone trying to regulate that sort of broad population data? Google does do more targeted stuff with custom intent ads, youtube ads, etc, but I don't think it's as large of a percentage of revenue. So population data is just a collection of individual data. So even if all you wanted was population data why would you stop at collecting summary statistics of every 1000 visitors? Also google searches are highly customized to each user (as are ads). I am not sure exactly what advertisers put in, but google places the ads based not only on how much the ad buyer is willing to bid, but also the probability of a click. In order to value click rate effectively you need data on individual profiles. This is why when I search a term and you search a term we get different search results and ads. I'm not an expert but happy to discuss in a DM so as not to get off topic. Link to comment Share on other sites More sharing options...
Jurgis Posted February 11, 2019 Share Posted February 11, 2019 AFAIK Google as FB tracks individuals across web pages using cookies for gathering info and advertising. So the system between the two is pretty similar. Google is probably using Gmail/google account as an anchor while FB uses FB account. Link to comment Share on other sites More sharing options...
Liberty Posted February 18, 2019 Share Posted February 18, 2019 Apologies if this has already been posted, but interesting email from Zuckerberg in 2015 talking about VR/AR, platforms vs apps, etc. Interesting look into how he sees strategy in the space: https://www.scribd.com/document/399594551/2015-06-22-MARK-S-VISION#fullscreen&from_embed Link to comment Share on other sites More sharing options...
Pauly Posted February 19, 2019 Share Posted February 19, 2019 Apologies if this has already been posted, but interesting email from Zuckerberg in 2015 talking about VR/AR, platforms vs apps, etc. Interesting look into how he sees strategy in the space: https://www.scribd.com/document/399594551/2015-06-22-MARK-S-VISION#fullscreen&from_embed Interesting. If the email is legitimate, it sheds more light on FB's thinking behind the Occulus purchase. Still, four years on and Unity is still independent. Did FB ever seriously pursue it? Were they rejected? Link to comment Share on other sites More sharing options...
Liberty Posted February 19, 2019 Share Posted February 19, 2019 Instagram engagement: https://www.axios.com/top-facebook-twitter-instagram-accounts-interactions-1550456097-439fdbe1-33c1-42be-a8d4-189c1899a6bb.html Link to comment Share on other sites More sharing options...
Liberty Posted February 25, 2019 Share Posted February 25, 2019 Verge piece on FB content moderators: https://www.theverge.com/2019/2/25/18229714/cognizant-facebook-content-moderator-interviews-trauma-working-conditions-arizona FB response: https://newsroom.fb.com/news/2019/02/commitment-to-content-reviewers/ Link to comment Share on other sites More sharing options...
DanielGMask Posted February 25, 2019 Share Posted February 25, 2019 Verge piece on FB content moderators: https://www.theverge.com/2019/2/25/18229714/cognizant-facebook-content-moderator-interviews-trauma-working-conditions-arizona FB response: https://newsroom.fb.com/news/2019/02/commitment-to-content-reviewers/ Very interesting and revealing. I'm always amazed about how reporter find a way to sensationalize a subject in order to make it more shocking. Thanks for the post! Link to comment Share on other sites More sharing options...
cameronfen Posted February 26, 2019 Share Posted February 26, 2019 Verge piece on FB content moderators: https://www.theverge.com/2019/2/25/18229714/cognizant-facebook-content-moderator-interviews-trauma-working-conditions-arizona FB response: https://newsroom.fb.com/news/2019/02/commitment-to-content-reviewers/ Very interesting and revealing. I'm always amazed about how reporter find a way to sensationalize a subject in order to make it more shocking. Thanks for the post! I feel like FB is in a catch-22. Either they dont remove fake news and disturbing content, or they pay an unskilled person to watch videos of murders and other offensive content to get this stuff off their site. That being said, there is no reason FB shouldn't pressure their contractors to pay better and provide better support. Obviously FB will foot the bill but even increasing costs by 10,000 per moderator is just 75 million in costs which is chump change for the company and pales in comparison to infrastructure investments. Link to comment Share on other sites More sharing options...
Liberty Posted March 7, 2019 Share Posted March 7, 2019 https://stratechery.com/2019/facebooks-privacy-cake/ Link to comment Share on other sites More sharing options...
rb Posted March 13, 2019 Share Posted March 13, 2019 I guess Facbook is having an oooopsy today. Link to comment Share on other sites More sharing options...
LongTermView Posted March 13, 2019 Share Posted March 13, 2019 Yeah, it has been down a long time. Link to comment Share on other sites More sharing options...
nickenumbers Posted March 16, 2019 Share Posted March 16, 2019 Guys, I have some long common stock and some call options [1 year] positions on FB. I know how to turn off the noise and move past the 24 hour [3 month] news cycle... But, wow, the last 1-2 years have been one thing after another. The DCF on FB is strong and I know it will/should work out over time, but the headline drag, and the internal turnover, and the egg on face events just keep coming. They seem to manage it pretty well... and then something else comes up.... again, and again. What the Heck? Am I getting fatigued by the constant news that I should be ignoring? Has FB reached the size and appeared on the radar of enough people/organizations that it will be forever a poster child of whatever the flavor of the month is? Anti-Trust, Privacy, Populism. I think I am going to take my 1 yr call options off the table and just sit back and give it some years to play out... The populist anti trust sentiment is getting harder to factor in to my thesis.. Or perhaps I didn't factor it in the past and I need to add it to my checklist before I put the position on. Link to comment Share on other sites More sharing options...
cameronfen Posted March 16, 2019 Share Posted March 16, 2019 Guys, I have some long common stock and some call options [1 year] positions on FB. I know how to turn off the noise and move past the 24 hour [3 month] news cycle... But, wow, the last 1-2 years have been one thing after another. The DCF on FB is strong and I know it will/should work out over time, but the headline drag, and the internal turnover, and the egg on face events just keep coming. They seem to manage it pretty well... and then something else comes up.... again, and again. What the Heck? Am I getting fatigued by the constant news that I should be ignoring? Has FB reached the size and appeared on the radar of enough people/organizations that it will be forever a poster child of whatever the flavor of the month is? Anti-Trust, Privacy, Populism. I think I am going to take my 1 yr call options off the table and just sit back and give it some years to play out... The populist anti trust sentiment is getting harder to factor in to my thesis.. Or perhaps I didn't factor it in the past and I need to add it to my checklist before I put the position on. One thing I take comfort in, was the same thing happened with cigarette companies (although I think FB is definitely not as bad for you as cigarettes). At some point people will realize all this bad news doesn't effect earnings and the stock will move up even when more bad news is announced. . Link to comment Share on other sites More sharing options...
Packer16 Posted March 17, 2019 Share Posted March 17, 2019 IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer Link to comment Share on other sites More sharing options...
cameronfen Posted March 17, 2019 Share Posted March 17, 2019 IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. Link to comment Share on other sites More sharing options...
John Hjorth Posted March 17, 2019 Share Posted March 17, 2019 ... I think this will happen overseas first. ... For everyone interested or invested in Facebook I would recommend to keep a close eye on the activities of Competition Commissioner Margrethe Vestager. Disclosure : The content of this post is biased. Link to comment Share on other sites More sharing options...
wisowis Posted March 17, 2019 Share Posted March 17, 2019 Other tech companies (Google, Microsoft, Amazon) all seem like bigger monopolies to me than Facebook. Facebook isn't even the leader in digital ads. Granted, in tandem with all the other bad press, it probably still is a risk. Link to comment Share on other sites More sharing options...
Packer16 Posted March 17, 2019 Share Posted March 17, 2019 IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer Link to comment Share on other sites More sharing options...
shalab Posted March 17, 2019 Share Posted March 17, 2019 FB break-up won't happen. There is wechat, viber and a host of other competitors from around the world. The game has changed since the 2000's when the last big anti-trust action against Microsoft. EU is a fee collecting body, they find US companies easy to target to reduce the burden on their own governments. (ala brexit). I think applying fines on US companies was easy with prior administrations but can have unpredictable consequences with the current one. There are several areas where the tariffs are asymmetric to EU's advantage, and there are non tariff barriers for USA goods/services. IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer Link to comment Share on other sites More sharing options...
Spekulatius Posted March 17, 2019 Share Posted March 17, 2019 FB break-up won't happen. There is wechat, viber and a host of other competitors from around the world. The game has changed since the 2000's when the last big anti-trust action against Microsoft. EU is a fee collecting body, they find US companies easy to target to reduce the burden on their own governments. (ala brexit). I think applying fines on US companies was easy with prior administrations but can have unpredictable consequences with the current one. There are several areas where the tariffs are asymmetric to EU's advantage, and there are non tariff barriers for USA goods/services. IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer 2 things to consider regarding the EU: 1) The EU has a collection of laws governing the use of data, the US is one of the few countries that doesn’t. I believe that the US tech companies and probably others have broken the intend of the law and I think this will lead to changes, but probably not breakups of companies. 2) The tax rates that the US tech companies pay in the EU (and the US for that matter) are egregiously low. As these companies will become a larger part of the economy, the EU has to do something about this (and in my opinion the US government as well). 3) FB is more vulernable to antitrust than GOOG, imo. FB has the vision of having a collection of social media properties being run with the same ad engine and probably consolidate the data in one warehouse. It’s a bit of a big brother vision. There could be an issue if the EU for example demands compartmentalization if the data. GOOG is more like a holding of various internet properties and if those were individual Spun off, the sum of them may be worth more than the whole company is worth now. Link to comment Share on other sites More sharing options...
shalab Posted March 17, 2019 Share Posted March 17, 2019 Your points are valid regarding EU and the data protection rules. EU is a body dominated by Germany (after Brexit) and all other countries are weak(France, Italy, Spain) or smaller (Austria, Netherlands, Sweden, Denmark) economies. Germany has declining population and is very much export driven. Germany will have to pay for all these other countries. USA has been paying for their defense as part of NATO. So applying fines on American companies was the easy way out for them but not clear how long they can continue this. In USA also, most of the big tech pays very little tax. MSFT for example books all software sales from Peurto Rico and avoids federal income taxes. Income from Peurto Rico is not subject to federal income tax. Pabrai also incorporated his company in Peurto Rico for this reason. FB break-up won't happen. There is wechat, viber and a host of other competitors from around the world. The game has changed since the 2000's when the last big anti-trust action against Microsoft. EU is a fee collecting body, they find US companies easy to target to reduce the burden on their own governments. (ala brexit). I think applying fines on US companies was easy with prior administrations but can have unpredictable consequences with the current one. There are several areas where the tariffs are asymmetric to EU's advantage, and there are non tariff barriers for USA goods/services. IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer 2 things to consider regarding the EU: 1) The EU has a collection of laws governing the use of data, the US is one of the few countries that doesn’t. I believe that the US tech companies and probably others have broken the intend of the law and I think this will lead to changes, but probably not breakups of companies. 2) The tax rates that the US tech companies pay in the EU (and the US for that matter) are egregiously low. As these companies will become a larger part of the economy, the EU has to do something about this (and in my opinion the US government as well). 3) FB is more vulernable to antitrust than GOOG, imo. FB has the vision of having a collection of social media properties being run with the same ad engine and probably consolidate the data in 9ne warehouse. It’s a bit of a big brother vision. There could be an issue if the EU for example demands compartmentalization if the data. GOOG is more like a holding of various internet properties and if those were individual Spun off, the sum of them may be worth more than the whole company is worth now. Link to comment Share on other sites More sharing options...
wisowis Posted March 17, 2019 Share Posted March 17, 2019 2 things to consider regarding the EU: 1) The EU has a collection of laws governing the use of data, the US is one of the few countries that doesn’t. I believe that the US tech companies and probably others have broken the intend of the law and I think this will lead to changes, but probably not breakups of companies. 2) The tax rates that the US tech companies pay in the EU (and the US for that matter) are egregiously low. As these companies will become a larger part of the economy, the EU has to do something about this (and in my opinion the US government as well). 3) FB is more vulernable to antitrust than GOOG, imo. FB has the vision of having a collection of social media properties being run with the same ad engine and probably consolidate the data in 9ne warehouse. It’s a bit of a big brother vision. There could be an issue if the EU for example demands compartmentalization if the data. GOOG is more like a holding of various internet properties and if those were individual Spun off, the sum of them may be worth more than the whole company is worth now. You use your Android phone (GOOG), boot up your Chrome browser (GOOG), to search for a new restaurant in google search (GOOG), read the reviews and get directions on google maps (GOOG), email your friends to meet you there on gmail (GOOG) and a self-driving Waymo car picks you up to bring you there (GOOG) and a buddy even books a flight to come join you from google flights (GOOG). All integrated with the google ad engine, which is >2x the size of Facebook's. I am not sure which is actually more vulnerable, but I think that it should be Google. Link to comment Share on other sites More sharing options...
cameronfen Posted March 18, 2019 Share Posted March 18, 2019 FB break-up won't happen. There is wechat, viber and a host of other competitors from around the world. The game has changed since the 2000's when the last big anti-trust action against Microsoft. EU is a fee collecting body, they find US companies easy to target to reduce the burden on their own governments. (ala brexit). I think applying fines on US companies was easy with prior administrations but can have unpredictable consequences with the current one. There are several areas where the tariffs are asymmetric to EU's advantage, and there are non tariff barriers for USA goods/services. IMO one of the issues here is the tone deafness of the CEO. The US has historically broken up monopolies and the longer that FB has great economics, does things like combine platforms & flexes its power muscles, the more it looks like & smells like a monopoly. I think this will happen overseas first. This is not reflected in the price. Under this scenario, FB, Instagram & What's App would compete with each other & reduce the margins of all three. I do not think this scenario is priced into the stock at all. Part of the issue is the lack of anti-trust enforcement over the past 30 years but to be fair there have been no sustained economics like FB or Google over that time period also. The other issue with FB is the question of whether its social network belongs to FB, its users or the local government. IMO FB is trying to expand from a technology provider (which most are comfortable with) to a social network owner (which IMO most are not comfortable with). Now this break-up may not happen next year but the longer the monopoly economics persist, the higher the probability of a break-up. If the economic deteriorates then a break-up will not occur but I also think this is also not in the stock price. Just my 2 cents. Packer I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer I dont believe a breakup will happen either but I wanted to hear packers thoughts. That being said I got this half an hour after Packer started this (see attachment) whole discussion. Link to comment Share on other sites More sharing options...
Packer16 Posted March 18, 2019 Share Posted March 18, 2019 To be clear at this point I do not think FB will be broken up but I think the way to think about this is in probabilities. The scenario for break-up has facts supporting it, namely, the increase in CPMs and the purchasing of competitors to reduce competition. The uncertainty today is how will FB perform going forward. If it continues to do better & its market power grows, break-up & anti-trust will be in its future. Since this how the US has dealt with these issues in the past. If CPMs decline & the market becomes more competitive then FB will remain unchanged. The other aspect about FB versus Amazon is that FB is playing in sandboxes outside of commerce like politics which a social network by nature is a pert of. This increases FB visibility & power in area that puts it in opposition to politicians, a losing proposition IMO. I also have a question if the FB model of owning the social network versus being a technology provider is sustainable given the scope of a social network is larger than commerce. This is why FB is in the news & will continue to be as it is more than technology provider. Packer Link to comment Share on other sites More sharing options...
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