13 ms·

Some fun Facebook facts from the earnings call/report - Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's

Some fun Facebook facts from the earnings call/report - Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's the third biggest S&P 500 company by this metric that isn't paying a dividend, after Berkshire Hathaway and Alphabet. - Facebook's headcount is now at 20,658. That's up 43 percent since last year - Average Revenue Per User Rises 23% to $4.73, Down from 4Q 2016 - Facebook Offers No Break Out of Instagram Revenue - 2Q Daily Active Users 1.32 Billion, Monthly Active Users 2.0 Billion - Shares Up 1.6% After-Hours, Near Session Highs - Zuckerberg: WhatsApp and Instagram Stories each have more than 250 million people using them daily. Each of those is a single SNAP whose entire daily user base is around 170 million. Wow, this is a company that is killing it right now. Facebook and Google combine to account for up to 99% of advertising growth. As this relates to SNAP, I have to think that investors will spend atleast a year spending marketing budges with SNAP but after that, RIP Snap...... Also as a crazy aside, Meg Whitman just resigned from the HP Board and has been reported to be visiting Uber.....

hawkice 9y ago
Important to remember that advertising revenue _always_ peaks in Q4, and that was an election year too, so even if they're down YoY this Q4 I wouldn't worry too much about it.
- blowski 9y ago
  Given Facebook's global reach, every year is going to be election year. I appreciate nobody spends on elections quite like the USA, but there's still a lot of money to go around in other countries.
  - frandroid 9y ago
    > I appreciate nobody spends on elections quite like the USA The scale is nowhere close. Maybe if you include black money, India might be a contender, but how much of that is spent online?
    - pm90 9y ago
      > Maybe if you include black money, India might be a contender, but how much of that is spent online? Not much. And besides, I don't think you could spend it online even if you wanted to. Unless Facebook is accepting cash payments for ads in India ;-).
      - legolas2412 9y ago
        Your establish fake accounts and pay those IT cells You pay influencers/fake news outlets/biased media sources. Though, not much is probably spent in India this way, but it's definitely there
sillysaurus3 9y ago
- Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's the third biggest S&P 500 company by this metric that isn't paying a dividend, after Berkshire Hathaway and Alphabet. How many companies in total have more than $35.5B cash/equivalents? Including Apple, for example.
- adventured 9y ago
  Ignoring debt: Microsoft ($126b), Apple ($256b), Facebook ($35b), Berkshire Hathaway (near $100b), Cisco ($68b), Google ($92b), Oracle ($66b), Softbank (a lot), Amgen ($38b), Ford ($40b), Samsung ($73b), Johnson & Johnson ($39b), GE ($82b) There are a lot of financial entities and the like that have more cash than that of course. It's held under a different financial context than the cash that eg Apple is sitting on. JP Morgan for example has $650b, Citi has $422b, Bank of America has $643b, etc.
  - sillysaurus3 9y ago
    Thank you! Out of curiosity, how did you put together that list? Googling seems to only bring up second-hand lists like https://thenextweb.com/insider/2011/08/22/big-money-the-companies-with-the-biggest-cash-piles-in-tech/ https://thenextweb.com/insider/2011/08/22/big-money-the-comp... but I think I'm using the wrong terms. (That's an interesting list too -- for comparison, Apple apparently had $76.2B in 2011.)
    - protomyth 9y ago
      Apple is also running up quite the debt (over $100B) in the US so the overall figure is actually lower. http://www.barrons.com/articles/apple-plans-to-sell-lots-of-bonds-but-no-30-year-maturities-1493920673 http://www.barrons.com/articles/apple-plans-to-sell-lots-of-...
      - seanmcdirmid 9y ago
        They do that because interest rates are low and much of their cash hasn't been repatriated (taxed) to the USA.
taurath 9y ago
99% of the growth!! Thoughts on anti-trust? If you're capturing every single part of the growth of a huge previously diversified market, whats the arguments against?
- sillysaurus3 9y ago
  It seems like it would be a disaster to break up Facebook. You can't really have more than one social network that everybody uses. Forcing everyone to split off into groups wouldn't work, to put it mildly.
  - huac 9y ago
    but they can break out instagram/whatsapp
  - heurist 9y ago
    They could be the global distributor for individual companies operating different regions, like a franchise but without regional providers existing under one corporate umbrella. That could open the market to competing distributors and regional operators. Unlikely and less efficient but that could be one way to handle it.
    - king07828 9y ago
      Split it into Facebook back-end, Facebook Red, FB Green, and FB Blue. FB back-end is the current back-end. The Red, Green, and Blue are separate front end that all have equal access to the back-end so a user of FB Red can friend a user of FB Blue. FB Red, Blue, and Green compete with each other on prices they charge to advertisers and can change their user interface to compete for users. Any user can use any one of FB R, G, or B and to get full access, but with their preferred UI
  - taurath 9y ago
    That's a good point - how could one even break it up? It depends on the network effect to get revenue from the ad platform. Maybe all the acquisitions or something - it's all so intertwined. Instead of it being a cable company, its more like "TV" as a whole.
rhizome 9y ago
Slightly interesting aside, 3.9B for 20,658 employees is ~$188K/employee profit, which is about a 20% drop from a few years ago[1]. I'm not an economist nor statistician. 1. https://www.buzzfeed.com/peterlauria/what-18-of-the-biggest-technology-and-media-companies-earn-p https://www.buzzfeed.com/peterlauria/what-18-of-the-biggest-...
- grenoire 9y ago
  Well, one thing is that the marginal profit of labour is bound to be diminishing at such scale. However, keep in mind that it's not marginal revenue, but profit. This means that it's still a viable strategy to increase the amount of employees for them. That drop is not necessarily an issue in accounting terms.
- btian 9y ago
  Why is that interesting? Companies should hire more people until marginal profit per new hire is $0 to maximize profits. And that number says nothing about marginal profits.
  - klodolph 9y ago
    No, because hiring affects future income and expenses, not just present.
  - nradov 9y ago
    Companies don't try to maximize total profit, but rather return on invested capital.
    - thaumasiotes 9y ago
      This can't possibly be right. Why would you forego making extra money to keep your statistical average up? What are you getting from the average number? Your theory predicts that price discrimination can't happen because companies would rather sell M widgets at X price than sell M widgets at X price and N widgets at Y price.
johansch 9y ago
This is the point where I'm smiling happily because I moved from being an FB user to being an FB stock owner. I feel like this pattern could be applied more often in real life... some company is being "evil"... don't just abandon them, buy stock in them!
- jacquesm 9y ago
  Buying their stock is supporting them so if you feel they are evil do not buy their stock.
  - johansch 9y ago
    You are assuming I don't want to profit on them being evil.
    - jacquesm 9y ago
      That makes you part of the evil. Really, your reasoning about this is not sound.
SomeStupidPoint 9y ago
Wait... So FB makes $1.60/mo per users through all that invasive marketing? ...Can I just give FB $5/mo to not keep their creepy profile on me? They get more money, I get not as creepily tracked.
- bishnu 9y ago
  No, because the set of users that would take FB up on this offer are the ones advertisers would like to reach most, and the subscription revenue would not come close to offsetting advertiser losses.
- andruby 9y ago
  FB makes $1.60/mo per user _on average_. The fact that you want/can pay $5/mo probably means FB earns a lot more than the avg on you. Advertisers pay more to reach people with higher disposable incomes.
- dzonga 9y ago
  So you pay for basic Facebook benefits without being tracked ?
- Trundle 9y ago
  Are you aware that facebook is very popular in the developing world? It basically is the internet for large amounts of SEA users. If that $5/month isn't sizeable to you then chances are that they make a shitload more off of your demographic than $1.60.
  - SomeStupidPoint 9y ago
    Likely so, but there's two facts to consider: I offered to pay 3x the average rate to account for some of that. I think that moves me into covering the average spread across the US and Western Europe (about a third of their active users). Now, I'm still probably one of the more valuable people, but it would be the average cost if all the revenue was spread across people who could afford that cost. Facebook already claims they don't use a profile to market to me. (It took some digging, but you can delete your tracking profile conclusions and turn off a lot of things.) Which means (assuming they're honest), I'm probably not a high value user because they can't target me for high value ads. This would just be giving them an alternative revenue stream to compensate for that. (So a strict improvement for Facebook.)
teirce 9y ago
Maybe I'm just a crazy millennial, but I absolutely loathe the idea of FB / Insta stories. Snapchat going under wouldn't convince me to move over -- I'd just stop using the service and move on to communicating some other way. And Stories aren't the only appeal of SNAP, though I suppose they are a large producer of revenue. HN just loves to hate SNAP, and I can't really fathom why. I can get being skeptical but every comment here seems like they /want/ to see the company fail.
- wcummings 9y ago
  Same, SnapChat is the only "social" app I use. I don't even use stories. Very few of my friends publish stories. I think mostly marketers use them.
  - ams6110 9y ago
    Everyone in my teen sons social circles use snap. Nobody is on Facebook.
- jdhn 9y ago
  Another crazy millennial here. I don't have an Instagram either, and frankly I don't want one. As for why HN hates Snap, I'm not exactly sure. Is it because the average user on HN is older and isn't targeted by Snap? Maybe it's seen as a frivolous plaything? No matter what the reason, there's definitely a lot of hate for Snap on this site.
  - eganist 9y ago
    My reasoning for loathing snap was their refusal to even allow a snap client for windows phone to exist.
    - jdhn 9y ago
      There actually was an unofficial Snap client for Windows Phone for a time. I thought it was pretty good to be honest.
ptr_void 9y ago
This makes me sad. I wish it was the case that the top companies have produced the most productivity/useful goods, not a messaging site with advertise that people use at their off times.
- brandnewlow 9y ago
  Facebook lets over a million companies get their products in front of people who are inclined to purchase them. When those Facebook users do in fact click and make purchases it is often (not always) a profitable exchange for the companies advertising. Those companies take the revenue from the sales and use it to pay people to do other work for them. Wherever it is you work, they probably advertise on Facebook. Creating a profitable revenue engine for a million companies is absurdly useful.
  - ptr_void 9y ago
    If not with Facebook and Alphabet, there would still be most of those companies selling their products, with other means or site. There's not much that Facebook adds other than number of people it has using their site during their off times. If people needed to buy things, they could have easily looked it up on other sites or real places. There are many companies that do much more important things, produces more useful goods/productivity/services.
    - corysama 9y ago
      If you are producing a useful good or service would you honestly prefer to market it pre-Facebook? The volume, price and ability to focus narrowly on only the people most likely to care... It's worth a lot to a lot of makers.
      - ptr_void 9y ago
        I don't doubt facebook's usefulness to many companies and online only businesses.
      - thinkfurther 9y ago
JesseAldridge 9y ago
> Monthly Active Users 2.0 Billion Just as a reminder of how insane this is, the population of the entire world is 7.5 billion.
- lavezzi 9y ago
  Users not people, right?
gvurrdon 9y ago
Is that $4.73 per user per year?
awkwarddaturtle 9y ago
> - Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's the third biggest S&P 500 company by this metric that isn't paying a dividend, after Berkshire Hathaway and Alphabet. It's "massive" but compared to AAPL's $250 billion in cash, FB's cash it is still fairly small. > Facebook and Google combine to account for up to 99% of advertising growth. They both pretty much dominate the search/video/social media space. What is most astounding to me is that every nation doesn't develop their own google/FB. I still find it incredible that most of europe is dominated by google and facebook. Even india. I respect what FB and GOOGL have done, but their "tech" isn't hard to replicate. With regulation and government authority, countries like germany, india, france, etc can develop their own FB and GOOGL. China, Russia, Japan, Korea, etc are smart in developing their own local tech/social media/etc industries. I'm so astounded that germany, france, india, etc have completely ceded their territories to google/FB/etc. I can understand britain/canada/australia ceding control to the US since we are anglo nations with similar culture, language and historical roots. But why don't spanish speaking countries, german speaking countries, french speaking countries, etc have their own "google/FB"?

hawkice 9y ago

Important to remember that advertising revenue _always_ peaks in Q4, and that was an election year too, so even if they're down YoY this Q4 I wouldn't worry too much about it.

blowski 9y ago
Given Facebook's global reach, every year is going to be election year. I appreciate nobody spends on elections quite like the USA, but there's still a lot of money to go around in other countries.
- frandroid 9y ago
  > I appreciate nobody spends on elections quite like the USA The scale is nowhere close. Maybe if you include black money, India might be a contender, but how much of that is spent online?
  - pm90 9y ago
    > Maybe if you include black money, India might be a contender, but how much of that is spent online? Not much. And besides, I don't think you could spend it online even if you wanted to. Unless Facebook is accepting cash payments for ads in India ;-).
    - legolas2412 9y ago
      Your establish fake accounts and pay those IT cells You pay influencers/fake news outlets/biased media sources. Though, not much is probably spent in India this way, but it's definitely there

sillysaurus3 9y ago

- Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's the third biggest S&P 500 company by this metric that isn't paying a dividend, after Berkshire Hathaway and Alphabet. How many companies in total have more than $35.5B cash/equivalents? Including Apple, for example.

adventured 9y ago
Ignoring debt: Microsoft ($126b), Apple ($256b), Facebook ($35b), Berkshire Hathaway (near $100b), Cisco ($68b), Google ($92b), Oracle ($66b), Softbank (a lot), Amgen ($38b), Ford ($40b), Samsung ($73b), Johnson & Johnson ($39b), GE ($82b) There are a lot of financial entities and the like that have more cash than that of course. It's held under a different financial context than the cash that eg Apple is sitting on. JP Morgan for example has $650b, Citi has $422b, Bank of America has $643b, etc.
- sillysaurus3 9y ago
  Thank you! Out of curiosity, how did you put together that list? Googling seems to only bring up second-hand lists like https://thenextweb.com/insider/2011/08/22/big-money-the-companies-with-the-biggest-cash-piles-in-tech/ https://thenextweb.com/insider/2011/08/22/big-money-the-comp... but I think I'm using the wrong terms. (That's an interesting list too -- for comparison, Apple apparently had $76.2B in 2011.)
  - protomyth 9y ago
    Apple is also running up quite the debt (over $100B) in the US so the overall figure is actually lower. http://www.barrons.com/articles/apple-plans-to-sell-lots-of-bonds-but-no-30-year-maturities-1493920673 http://www.barrons.com/articles/apple-plans-to-sell-lots-of-...
    - seanmcdirmid 9y ago
      They do that because interest rates are low and much of their cash hasn't been repatriated (taxed) to the USA.

taurath 9y ago

99% of the growth!! Thoughts on anti-trust? If you're capturing every single part of the growth of a huge previously diversified market, whats the arguments against?

sillysaurus3 9y ago
It seems like it would be a disaster to break up Facebook. You can't really have more than one social network that everybody uses. Forcing everyone to split off into groups wouldn't work, to put it mildly.
- huac 9y ago
  but they can break out instagram/whatsapp
- heurist 9y ago
  They could be the global distributor for individual companies operating different regions, like a franchise but without regional providers existing under one corporate umbrella. That could open the market to competing distributors and regional operators. Unlikely and less efficient but that could be one way to handle it.
  - king07828 9y ago
    Split it into Facebook back-end, Facebook Red, FB Green, and FB Blue. FB back-end is the current back-end. The Red, Green, and Blue are separate front end that all have equal access to the back-end so a user of FB Red can friend a user of FB Blue. FB Red, Blue, and Green compete with each other on prices they charge to advertisers and can change their user interface to compete for users. Any user can use any one of FB R, G, or B and to get full access, but with their preferred UI
- taurath 9y ago
  That's a good point - how could one even break it up? It depends on the network effect to get revenue from the ad platform. Maybe all the acquisitions or something - it's all so intertwined. Instead of it being a cable company, its more like "TV" as a whole.

rhizome 9y ago

Slightly interesting aside, 3.9B for 20,658 employees is ~$188K/employee profit, which is about a 20% drop from a few years ago[1]. I'm not an economist nor statistician. 1. https://www.buzzfeed.com/peterlauria/what-18-of-the-biggest-technology-and-media-companies-earn-p https://www.buzzfeed.com/peterlauria/what-18-of-the-biggest-...

grenoire 9y ago
Well, one thing is that the marginal profit of labour is bound to be diminishing at such scale. However, keep in mind that it's not marginal revenue, but profit. This means that it's still a viable strategy to increase the amount of employees for them. That drop is not necessarily an issue in accounting terms.
btian 9y ago
Why is that interesting? Companies should hire more people until marginal profit per new hire is $0 to maximize profits. And that number says nothing about marginal profits.
- klodolph 9y ago
  No, because hiring affects future income and expenses, not just present.
- nradov 9y ago
  Companies don't try to maximize total profit, but rather return on invested capital.
  - thaumasiotes 9y ago
    This can't possibly be right. Why would you forego making extra money to keep your statistical average up? What are you getting from the average number? Your theory predicts that price discrimination can't happen because companies would rather sell M widgets at X price than sell M widgets at X price and N widgets at Y price.

johansch 9y ago

This is the point where I'm smiling happily because I moved from being an FB user to being an FB stock owner. I feel like this pattern could be applied more often in real life... some company is being "evil"... don't just abandon them, buy stock in them!

jacquesm 9y ago
Buying their stock is supporting them so if you feel they are evil do not buy their stock.
- johansch 9y ago
  You are assuming I don't want to profit on them being evil.
  - jacquesm 9y ago
    That makes you part of the evil. Really, your reasoning about this is not sound.

SomeStupidPoint 9y ago

Wait... So FB makes $1.60/mo per users through all that invasive marketing? ...Can I just give FB $5/mo to not keep their creepy profile on me? They get more money, I get not as creepily tracked.

bishnu 9y ago
No, because the set of users that would take FB up on this offer are the ones advertisers would like to reach most, and the subscription revenue would not come close to offsetting advertiser losses.
andruby 9y ago
FB makes $1.60/mo per user _on average_. The fact that you want/can pay $5/mo probably means FB earns a lot more than the avg on you. Advertisers pay more to reach people with higher disposable incomes.
dzonga 9y ago
So you pay for basic Facebook benefits without being tracked ?
Trundle 9y ago
Are you aware that facebook is very popular in the developing world? It basically is the internet for large amounts of SEA users. If that $5/month isn't sizeable to you then chances are that they make a shitload more off of your demographic than $1.60.
- SomeStupidPoint 9y ago
  Likely so, but there's two facts to consider: I offered to pay 3x the average rate to account for some of that. I think that moves me into covering the average spread across the US and Western Europe (about a third of their active users). Now, I'm still probably one of the more valuable people, but it would be the average cost if all the revenue was spread across people who could afford that cost. Facebook already claims they don't use a profile to market to me. (It took some digging, but you can delete your tracking profile conclusions and turn off a lot of things.) Which means (assuming they're honest), I'm probably not a high value user because they can't target me for high value ads. This would just be giving them an alternative revenue stream to compensate for that. (So a strict improvement for Facebook.)

teirce 9y ago

Maybe I'm just a crazy millennial, but I absolutely loathe the idea of FB / Insta stories. Snapchat going under wouldn't convince me to move over -- I'd just stop using the service and move on to communicating some other way. And Stories aren't the only appeal of SNAP, though I suppose they are a large producer of revenue. HN just loves to hate SNAP, and I can't really fathom why. I can get being skeptical but every comment here seems like they /want/ to see the company fail.

wcummings 9y ago
Same, SnapChat is the only "social" app I use. I don't even use stories. Very few of my friends publish stories. I think mostly marketers use them.
- ams6110 9y ago
  Everyone in my teen sons social circles use snap. Nobody is on Facebook.
jdhn 9y ago
Another crazy millennial here. I don't have an Instagram either, and frankly I don't want one. As for why HN hates Snap, I'm not exactly sure. Is it because the average user on HN is older and isn't targeted by Snap? Maybe it's seen as a frivolous plaything? No matter what the reason, there's definitely a lot of hate for Snap on this site.
- eganist 9y ago
  My reasoning for loathing snap was their refusal to even allow a snap client for windows phone to exist.
  - jdhn 9y ago
    There actually was an unofficial Snap client for Windows Phone for a time. I thought it was pretty good to be honest.

ptr_void 9y ago

This makes me sad. I wish it was the case that the top companies have produced the most productivity/useful goods, not a messaging site with advertise that people use at their off times.

brandnewlow 9y ago
Facebook lets over a million companies get their products in front of people who are inclined to purchase them. When those Facebook users do in fact click and make purchases it is often (not always) a profitable exchange for the companies advertising. Those companies take the revenue from the sales and use it to pay people to do other work for them. Wherever it is you work, they probably advertise on Facebook. Creating a profitable revenue engine for a million companies is absurdly useful.
- ptr_void 9y ago
  If not with Facebook and Alphabet, there would still be most of those companies selling their products, with other means or site. There's not much that Facebook adds other than number of people it has using their site during their off times. If people needed to buy things, they could have easily looked it up on other sites or real places. There are many companies that do much more important things, produces more useful goods/productivity/services.
  - corysama 9y ago
    If you are producing a useful good or service would you honestly prefer to market it pre-Facebook? The volume, price and ability to focus narrowly on only the people most likely to care... It's worth a lot to a lot of makers.
    - ptr_void 9y ago
      I don't doubt facebook's usefulness to many companies and online only businesses.
    - thinkfurther 9y ago

JesseAldridge 9y ago

> Monthly Active Users 2.0 Billion Just as a reminder of how insane this is, the population of the entire world is 7.5 billion.

lavezzi 9y ago
Users not people, right?

gvurrdon 9y ago

Is that $4.73 per user per year?

awkwarddaturtle 9y ago

> - Facebook has a massive, $35.5 billion hoard of cash, cash equivalents and marketable securities. It's the third biggest S&P 500 company by this metric that isn't paying a dividend, after Berkshire Hathaway and Alphabet. It's "massive" but compared to AAPL's $250 billion in cash, FB's cash it is still fairly small. > Facebook and Google combine to account for up to 99% of advertising growth. They both pretty much dominate the search/video/social media space. What is most astounding to me is that every nation doesn't develop their own google/FB. I still find it incredible that most of europe is dominated by google and facebook. Even india. I respect what FB and GOOGL have done, but their "tech" isn't hard to replicate. With regulation and government authority, countries like germany, india, france, etc can develop their own FB and GOOGL. China, Russia, Japan, Korea, etc are smart in developing their own local tech/social media/etc industries. I'm so astounded that germany, france, india, etc have completely ceded their territories to google/FB/etc. I can understand britain/canada/australia ceding control to the US since we are anglo nations with similar culture, language and historical roots. But why don't spanish speaking countries, german speaking countries, french speaking countries, etc have their own "google/FB"?