Facebook

[mainelefty]

I think the brother sister team here manages at a a very high level. I suspect they were unpleasantly surprised by the amount of fallout for them from the sub rosa political hijackings of the site in 2016, fallout which has not completely abated. This seems like a way to sanitize the common experience and make it more friendly/less controversial.

I think they are seeking world domination and this won’t slow them down much. For as long as the growth doesn’t markedly slow, I let the trend be my friend here, long and staying that way.

– Also a Jimbo

[captainccs]

If you don’t own the stock, why?

1.- I don’t like Facebook, the website
2.- I invest in high tech and internet via ETFs

Denny Schlesinger

[captainccs]

Negatives

-getting harder to grow with the law of large numbers

It’s not the law of large numbers but market penetration.

law of large numbers

The law of large numbers is a principle of probability according to which the frequencies of events with the same likelihood of occurrence even out, given enough trials or instances. As the number of experiments increases, the actual ratio of outcomes will converge on the theoretical, or expected, ratio of outcomes.

http://whatis.techtarget.com/definition/law-of-large-numbers…

The law of large numbers has application, for example, in insurance. You don’t know when a person will die but if you look at a population as a whole you know what the mortality rate is and what insurance premiums to apply. The larger the population the more accurate the mortality rate.

Market penetration is what governs growth rates which is best illustrated by the “S” curve. Typically growth starts slowly until around 15% market penetration is achieved. At this point more people pile in and the growth rate accelerates creating the “curve in the hockey stick,” the bottom curve of the “S.” Fast growth continues until around 85% market penetration when you start running out of new buyers. At this time the tip of the “S” is put in place. Once you have all the market the most you can grow is as fast as the market itself grows – this is known as “vegetative growth.”

4.2.2 Population growth

Latin America will have a projected population of somewhere between 554 million (481) and 637 million (37) by the year 2000. Most of this increase will be absorbed by the big cities, for nearly half the product of the vegetative growth in rural areas emigrates to the cities (37, 46, 227, 373).

http://www.fao.org/docrep/t0750e/t0750e0s.htm#4.2.2%20popula…

The “S” curve

https://www.google.com/search?q=the+%22S%22+curve&num=50…

What you should look for is market penetration of the industry as a whole first and then FB’s share of it.

Denny Schlesinger

[foodles]

Some comments from this thread…

my experience is that anyone 20 and under does not use FB to nearly the same level as those 30 and older. As a point none of my teenage kids use facebook; neither do any of their friends. They use Snapchat like crazy; and occationaly use Instagram.

I have A 15yr old. He has never been on Facebook and has said he most likely never will be on it.
He does use snapchat a lot, plus utube. Most of his friends use instagram.

I also concur with these assessments, that those 20-25 and under do not use FB much, but, I also think that will change as they get older, especially when they have a family. That is why people like FB, to keep track of what’s going on with family/friends. I wasn’t on FB for a long time, but when I started missing out on some events because I didn’t check my unused FB account, I started becoming more active on it, and I do enjoy seeing what family and friends are up to that I didn’t know before.

I think as the younger set ages, they will start using FB more…whether you consider that a reason to invest is beyond my point, my point is that we don’t need to worry about the fact that the younger age groups aren’t currently FB users…they will be.

[MaineReason]

Up 53% and still climbing.

I’m up 141.3% so far.

– This…is the MaineReason
Long FB

[VitamanD]

I will tell you my thoughts-which are largely shaped by my own usage of facebook. Over the last few months I stopped using it, first as an experiment and then after realizing when i came back that most of my feed was ads and that posts from friends were few and far between. It is my impression that many of my friends have also abandoned it too but maybe that it just the way the feed is structured. In any case, has it affected my experience? Yes, no doubt about that. So, as a long term stock holder, I think it’s great that they are doing something about it. In the short term my fear is that the issue is already affecting facebook usage. If earnings reveal this, we could see another hit at earnings time. It’s great if they are so far ahead of the game that the company is taking action pro-actively based on user experience surveys, and that’s possible too of course. Most people I’ve read seem to think this will just be a blip in a long term trend upwards, and I don’t disagree with that. Am still long options but reduced my position by about a third until I see what happens at earnings time.

As for size being a determinant of potential- people told me that about Apple when it was less than a third of the market cap it is now, so I’m not buying that.

[Goofyhoofy]

what Are your thoughts on Facebook with the news feed change?

Short term, irrelevant. Long term, almost irrelevant. Really long term, maybe not.

Removing news from the newsfeed and putting more “friends” posts in only makes the silos more vertical. Liberals complaining to liberals, conservatives complaining to conservatives. Nobody fact checking anything anymore, more intrusion from bad actors, less real world.

Yes, it may lengthen “engagement” time slightly, so for their advertising that’s good. For society maybe not so much. Others may laugh, but unless the get in front of their fake news problem and election problem I can forsee regulation in their future. What form that might take I have no idea, but I wouldn’t dismiss it out of hand. Zuck “hiring people” to monitor? Seriously? A billion posts a day? How can that work?

Facebook is anathema with the younger set, they like instagram or snapchat or whatever (Facebook owns some of this so while it doesn’t monetize as well, at least they have a toe in the future, so to speak.) But I have to agree with others that the law of large numbers will weigh them down some; they’re already huge, as big as the three 3-letter networks combined by ad revenue. That doesn’t mean they’re through, though. They will figure out how to get into live sports or other things that are still ahead, I’m sure, so there’s some future there, too. Will they take on Netflix? I have my doubts, but that could happen, too. They have a eBay challenge, but that’s a bust so far, too.

The moat is huge, I wouldn’t worry about a direct competitor, and frankly I don’t see minnows nipping at the whale either, at least now (except the already mentioned kids’ sites). But as for changing the newsfeed? Yawn, a pretty big non-event I think.

I’ve had it since the post IPO drop, since 17 and will continue to hold it, and I could be talked into adding with a good argument, but I probably won’t because I haven’t heard it yet. Change in news feed? That’s not it, at least enough not to move the needle significantly. Growth from here? Sure. Rocket ship? I think not, not without some other spellbinding initiative.

Regulation. That’s the threat. I expect it in foreign lands first, and that might presage movement here, although it’s a lot harder. Google is facing headwinds in Europe because of it, don’t think it can’t happen.