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While I generally agree with this analysis - Facebook's potential growth makes the P/E of 27 look pretty cheap - it ignores the serious decline in use among you
by MarkMc 8y ago
While I generally agree with this analysis - Facebook's potential growth makes the P/E of 27 look pretty cheap - it ignores the serious decline in use among young people.
In 2016 88% of online users in the US aged 18-29 used Facebook [1], but in the last 18 months that figure has dropped to around 82% [2]. Luckily for Facebook it also owns Instagram, but will it own the next generation's social media app?
In 20 years I'm confident that Star Wars, McDonald's and Nike will still be popular with young people. But will Instagram?
[1] http://www.pewinternet.org/2016/11/11/social-media-update-2016/ http://www.pewinternet.org/2016/11/11/social-media-update-20...
[2] http://www.pewinternet.org/2018/03/01/social-media-use-in-2018/ http://www.pewinternet.org/2018/03/01/social-media-use-in-20...
- nl 8y agoThe FB decline amongst young people is more than made up for by the increased instagram usage. The real question isn't if FB, Insta or WhatsApp will be popular in 20 years. To a large extent that doesn't matter. The real question is - if communication on the internet will continue to be a large part of people's lives - are their any circumstances where FB can't buy a new player (or copy and outship it, aka SNAP). There are circumstances where this could happen - if Tencent decided to go after the US market they could - in theory - build out a FB competitor around the WeChat install base. They are too big for FB to buy, and can ship software just as quickly as FB can. But this is a hard play (as Google learnt), and so it's really just a sci-fi scenario - not the kind of thing which should affect FB's stock price.