9 ms·

After almost 20 years of doing business isn’t it about time that Facebook starts to position itself as a value company rather than a growth company? Realistica

After almost 20 years of doing business isn’t it about time that Facebook starts to position itself as a value company rather than a growth company? Realistically they had one big growth avenue and that was acquisitions but the regulatory (or rather political) environment doesn’t allow for it. I get that it is hard to let go of that growth mindset after 20 years of crazy growth but at some point the journey ends and you have to reorient the business (imo). I am not saying stop investing but scale it down a notch, set realistic budgets, pay a dividend or buyback stock. Maybe if they had shifted their mindset away from growth at all cost earlier they wouldn’t have gotten such a bad rep. I feel the same about Google. I wonder how much money their non-ad, non-cloud stuff made of its life time and if it has been profitable. In the end the goal of a company (whether you agree with it our not) is not to get as big as possible but to generate as much cash for its shareholders as possible. And I think Facebook over extended with going all in on Meta. But perhaps I am looking at this with too much hindsight.

kccqzy 4y ago
> I feel the same about Google. I wonder how much money their non-ad, non-cloud stuff made of its life time and if it has been profitable. That's like asking Apple how much money it made from sources other than hardware sales and online service sales.
khuey 4y ago
> In the end the goal of a company (whether you agree with it our not) is not to get as big as possible but to generate as much cash for its shareholders as possible. Facebook's goal is to do whatever Zuckerberg wants, since he still controls a majority of the votes. It's a fascinating test of the value of corporate governance rights.
- urthor 4y ago
  ^^^ have to emphasize. 60-80% of the cost base in many F500s is bullshit (exceptions exist. FMCG, any industry where physical products make up their balance sheet. Not salaries). Any excuse to avoid returning money to shareholders. Everyone quietly acknowledges. If say, Visa, really tried, they could cut the cost base by 50% and achieve the same output. Carl Icahn style shareholder activists have a point. Forget tech companies. Most public companies are a conspiracy by VPs/C-suite/board. The difference with tech companies is Google feather-beds its EMPLOYEES with free food. From a pure capitalist standpoint. You could run Facebook's business on 20 billion USD in costs. Their cost base is enormous because Z has ZERO interest in cutting costs. He's in it for the ego/vanity. Same as every other F500 CEO/Chairman. Ego is the driver, not the balance sheet.
  - mi_lk 4y ago
    there's one quote in Ben Thompson's recent Meta article that I really buy. If you look from this angle many Meta's moves make sense > What is clear is that Zuckerberg in particular seems more committed to VR than ever. It may be the case that he is seen as the founding father of the Metaverse, even as Meta is a potential casualty. https://stratechery.com/2022/meta-meets-microsoft/ https://stratechery.com/2022/meta-meets-microsoft/
    - r00fus 4y ago
      So Zuck is bought into metaverse, but can they transition? My guess is this is going to be a really rough winter / several quarters for Facebook until they reconsider.
      - munk-a 4y ago
        They're throwing loads of technical resources at that - so they should be able to build it - but the problem is the "and they will come part". VR Gaming is awesome, BeatSaber is a wonderful game to engage in... for about an hour or so max - you'll want to shift gears and get your head out of the headset just to relax your eyes. Zuckerberg seems to envision matrix-style VR where it's 24/7 immersive and nobody outside a very small fringe group is at all interested in that proposition. I just fail to see the value proposition of VR socialization over video and even voice calls. If you'll recall even video calls have only really caught on since the pandemic - skype did business pre-pandemic, but it was still a fringe tool for social purposes and much more likely to see use in a work setting. It might be that VR can break into the workplace - but I have my skepticism.
        deleted 4y ago
        [deleted]
        chrischen 4y ago
        I don’t fully understand what the metaverse plans are, but if you look at the design of the quest pro that just released then what you say is not true. It’s an AR first device that doesn’t even come with full light blockers that make it usable as a fully immersed VR device. I agree with you VR is not the future but AR definitely is, and even Apple has been making silent but consistent investments in AR for more than the past 5 years.
- yieldcrv 4y ago
  Exchanges have listing standards related to share composition and size of float They can extend that to these voting class shares imbalances and start a cascade of changes
  - modeless 4y ago
    S&P 500 already prohibited multiple share classes. Meta and Google are grandfathered in.
- subsubzero 4y ago
  Also would like to add that once you go this route(being a value company) rightly or wrongly you just died a little(many perceive this) and recruiting and talent retention becomes alot harder as who wants to work for the tech equivalent of a proctor and gamble or coca cola. Apple did do the dividend a few years back, so maybe a slow pivot could work. But a growth company can only grow so far as all the people who want to use FB's services have used them so its a natural progression for any company like FB.
  - Kye 4y ago
    >> "who wants to work for the tech equivalent of a proctor and gamble or coca cola" People who value stability and work-life balance. It's great for people who see a job as a way to fund life and put something away for security later in life, not as a calling they're willing to sacrifice everything for.
- mathattack 4y ago
  It is, though the currency he lays his employees with is equity. That’s the challenge that Big Tech has to confront. If the stock value falls too much, Zuck won’t be able to convince engineers to join him for the ride.
  - sangnoir 4y ago
    The way RSUs are calculated (dollar amount to shares at time of hiring) he'll be able to convince new joiners just fine. Holding onto current employees would be the challenge - assuming he wants to hold onto them in the first place.
    - bagels 4y ago
      Only if they think the stock won't continue the decline.
    - pardesi 4y ago
      Why would new employees (at current quality or better) would join his mission of self-destruction?
      - CoastalCoder 4y ago
        I suspect that many, many software developers would happily help Zuckerberg to implode. Getting paid well is just a bonus.
      - m-ee 4y ago
        I made it through the on-site only to hit the hiring freeze. It’s a well paying remote job even factoring in stock depreciation, moderately interesting work, and I’d happily spend zuck’s money on VR goggles no one needs until it all implodes.
      - loeg 4y ago
        The pay is still good, if not great. My salary is approximately the same as total comp at my previous job. Even with the stock down around $104, my total comp is still some significant chunk better than previous comp (20-30%). (I'm an IC5 SWE.) It will eventually be a problem (in the sense that switching to GOOG or AMZN will be a much better prospect) if the stock continues to go down, of course. And a new hire evaluating their stock package should probably be a little concerned about the trend. The infrastructure to support you getting your work done is great. There are reasonably interesting software problems to solve. There are smart people to work with. There are some good benefits.
brentm 4y ago
That isn't really something a publicly traded company can do without putting even more pressure on it's share price. Mark's also still very young, if he wanted to ride off into the sunset he could have done that a long time ago. I give him a lot of credit for staying in the drivers seat given the political pressure they've been under since 2016 and now this period. It would have been a lot easier for him to just checkout and hang out on a mega yacht all day.
- mccorrinall 4y ago
  Mark doesn’t give a shit about share price, otherwise there would be buybacks right now. Meta still has a donkey which shits gold: even facebook still had 4% DAU growth yoy, while people make fun about fb using users to tiktok. No, Mark wants a war chest and will increase investments for his meta verse. But I would never bet against Mark.
  - Karrot_Kream 4y ago
    > Share repurchases – We repurchased $6.55 billion of our Class A common stock in the third quarter of 2022. As of September 30, 2022, we had $17.78 billion available and authorized for repurchases No buybacks, like this?
  - colinmhayes 4y ago
    meta has bought back 5% of its shares this year. Not sure where you got the idea that buybacks aren't happening. They even took long term debt for what I understand to be the first time in order to facilitate more buybacks.
    - deleted 4y ago
      [deleted]
  - __MatrixMan__ 4y ago
    The only people I've met who care at all about the metaverse are terrified of it (giving an advertiser live access to metrics like pupil dilation is creepy), or appreciate the opportunities that it creates to make fun of Zuckerberg. Are there people out there who intend to use it? I remember when Facebook was invite-only. It was cool. Everybody wanted in. This... I think this is grounds to bet against Mark.
anonu 4y ago
I don't think there's a time limit on growth. Growth is also market perception based on what P/E multiple the market pays for your share. Value stocks are usually utilities, both actually and figuratively. We all know that Facebook is not a utility nor a necessity. They need growth.
- Cwizard 4y ago
  I disagree. Growth is an attitude. I worked at startups and at mature companies. In a growth company you usually do not have to justify work in term of profitability but in terms of growth. Then when the company is sufficiently large different management is brought in and the company is made profitable. Budgets are put in place. If you want to get something done, you have to ask for budget, and justify the cost yearly. At least from my experience.
kypro 4y ago
The distinction between "value" and "growth" isn't clear. You can be both a growing company and trading at a value-like multiple. META more than other big tech companies has been scaling back significantly this year and were one of the first to do so. They're also buying back a ton of stock and with operating margins in excess of 80% it's almost insane how conservative they've been with spending money over the years. This is hardly a "growth at all costs" company. This is one of the most profitable companies ever. META also isn't going "all in" on the Metaverse. They're investing a portion of their cashflows on AR/VR technology. The media is so focused on the headset that I think people are missing the fact that in a lot of ways META is inventing the wheel that will support the AR/VR products of the future. Even if they don't make a success of their Metaverse, their technology will still have real value to the ever increasing number of companies operating in this space. TL;DR: META is trading as a value stock, they are cutting back, they are returning a ton of profits to shareholders, and they're not going all in on growth or the Metaverse.
- adam_arthur 4y ago
  Their expenses are up significantly, there is no cutting back up to this point. A few FAANGs gave lip service to being more frugal, but their earnings releases and operating costs show they were anything but. Part of the reason Meta is crashing is because they are being even more aggressive/spending more on metaverse next year than they previously stated. 19% growth in costs while having -4% revenue over the year ago quarter. https://investor.fb.com/investor-news/press-release-details/2022/Meta-Reports-Third-Quarter-2022-Results/default.aspx https://investor.fb.com/investor-news/press-release-details/...
  - kypro 4y ago
    A little late here, but want to say you're correct. I thought they were cutting back on Metaverse R&D a bit, but clearly not.
missedthecue 4y ago
META share buybacks last four quarters June 30, 2022: $5.233B March 31, 2022: $9.506B December 31, 2021: $20.06B September 30, 2021: $13.46B
impulser_ 4y ago
You can see how much Google spends and makes on everything outside ads and cloud. They report it as "Other bets" on their financial reports. Last Q they made 209m in revenue on other bets, and lost 1.6b on those bets. The only profitable business for Google is Ads. Cloud, and other bets burn about 3b dollars every Q.
- blinding-streak 4y ago
  Incorrect. Google has a line item called "Google other" that is $7B in the most recent quarter. It accounts for things like Google Play revenue, YouTube and YT TV subscriptions, hardware revenue from Pixel, nest, etc. They don't report profitability from this line item. But obviously something like Google Play margins will be very high. And they're probably losing money on the hardware.
  - oars 4y ago
    Thank you for explaining "Google other" on the financial statement.
altdataseller 4y ago
They did buy back stock in the past few years
- Cwizard 4y ago
  Ok, I didn’t know. I sold most of my facebook stock late 2019. And haven’t really looked at the company since.
andsoitis 4y ago
> After almost 20 years of doing business isn’t it about time that Facebook starts to position itself as a value company rather than a growth company? and > the journey ends and you have to reorient the business (imo) Isn't that the point of reorienting themselves to the meta verse. It is a new, unconquered land with virtually unlimited space and possibility? Arguing against myself now: while this might be true from a product standpoint, their business is advertising, so unless they find other ways to monetize, the growth rate is limited by advertising dollars / share.
bitL 4y ago
Being one of the largest companies in the world, they are definitely treated as value stock by investors already.
pardesi 4y ago
A company needs to be valuable today with growth investments that can make it more valuable over time. That is what a stock valuation is. If Zuck had raised bonds or sold his stocks & funded his Meta madness, then he could have used the current cash flow into improving the operations of the current business, improve the margin & manage business threats to maintain the market position. He is definitely a kid without any adult supervision at this point.
Firmwarrior 4y ago
> In the end the goal of a company (whether you agree with it our not) is not to get as big as possible but to generate as much cash for its shareholders as possible Man, why does everyone have the same values nowadays as Milton Friedman and The Warthog? Relevant video clip: (NSFW, very offensive language) https://youtu.be/7j1850-qlm8?t=19 https://youtu.be/7j1850-qlm8?t=19 Facebook's (stated) mission isn't to make money or get big, it's to bring people together. If they can make VR user-friendly and ubiquitous, I think that will serve their stated goal. If Facebook just decided to hunker down and count their money, they'd be doomed to eventually fade away just like so many tech juggernauts have in the past.
- _carbyau_ 4y ago
  > Facebook's (stated) mission isn't to make money or get big, it's to bring people together. The business plan so far seems to be: 1. Make VR work 2. ??? 3. People come together! Smallprint: make lots of money along the way... I am interested as to whether there exists a concrete plan for step 2 but I am dubious of this direction.
  - paganel 4y ago
    > 3. People come together! Difficult to make them come together without throwing up, literally. I almost got to the point where only thinking about the abstract concept of VR makes me a little dizzy. But the logic goes something like this: Zuckerberg has built a $1 trillion company already => he knows what he's doing => we should trust him with the tens of billions of dollars he's throwing at this, trust him that is compared to the schmucks that say that this won't go anywhere, they haven't built $1 trillion companies themselves. I predict that around the mark of $100-150 billion thrown down the VR drain some share-holders will actually start to throw some hard questions at Zuckerberg, and in another one or two years after this the project will have the fate of Google+.
    - Firmwarrior 4y ago
      I dunno if Facebook is going to make it there, but I think their goal for VR is feasible and achievable. All the functionality is there on their platform and others right now, but it's too slow to boot up and not polished enough yet. Unfortunately, tiny performance hiccups in VR will immediately nauseate most people, not to mention the friction of having to put on the headset, boot it up, navigate through slow menus, launch an app, log into a room... If you could toss on your VR helmet for 2 minutes to pop into VR and chat with someone the way you can open a Zoom call today, it'd be a huge quality of life improvement for remote work. Or like Carmack was saying recently, you could get to a point where it's cheaper to mail out a thousand headsets than to host a conference in person Tangential edit: Man, how nuts is it that Facebook is throwing billions of dollars a year into this? Palmer Luckey invented modern VR in his spare time as a kid living in a trailer next to his parents' house. You've got VR startups out there making interesting devices, amazing multi-user worlds, and all sorts of other things for a few million bucks per company. It makes sense that if they have the money they should try to do something useful with it, and silicon valley engineers/hardware development don't come cheap, but that's just such an incredible amount of money.
scarface74 4y ago
Both Apple and Microsoft are 45+ year old tech companies. Look where they were in the mid 90s when they were already 20 years old compared to where they are now.
- Cwizard 4y ago
  I am not saying Facebook should stop growing. It should just not keep dumping money in these unproven projects, and they should get some people on board to fix their cost structure. Apple and Microsoft are much more mature companies than Facebook is. Microsoft had major restructuring a couple of years ago. And I think Apple also had some major reforms internally around 2015-16 to make its operations more efficient. Apple accumulated a massive amount of cash over that period. I am not as much into it anymore as I sold most of my holdings near the end of the pandemic. So maybe things have changed since then. Netflix is another company I have serious questions about. Not sure about their current situation but around 2017 when I looked into them, they were essentially a company that sells you a dollar for 99c. Their ratio internal content/external content was not high enough which meant they had massive recurring licensing costs which they funded by a mix of subscriptions revenue and debt (a lot of debt). The story was that that would be ok once they reached ‘scale’ as costs would be the same but they would have more subs. In my opinion that logic is flawed since presumably the cost of the licensing deals will also rise as more players entered the market and content holders got less money from traditional sources (because everyone uses those subscriptions services now). Netflix made sense when they were able to buy the content for cheap because they were niche. My opinion of course. Im just a random dude on the internet.
  - scarface74 4y ago
    > I am not saying Facebook should stop growing. It should just not keep dumping money in these unproven projects, On the Apple side, the iPod, iTunes, the iPhone, the iPad, and the watch were all unproven projects. On the Microsoft side, giving up immediate revenue from selling Office for $600 - seat into a subscription service for $69-$99 a year had to be a short term revenue hit. Not to mention XBox which loss billions before becoming successful and Azure. Meta doesn’t have a choice. I really hate the Facebook product. Not because of the privacy angle, it commits the worse sin of any product - it just sucks now. Most of the post I see aren’t even from people let alone brands and websites I chose to follow.

kccqzy 4y ago

> I feel the same about Google. I wonder how much money their non-ad, non-cloud stuff made of its life time and if it has been profitable. That's like asking Apple how much money it made from sources other than hardware sales and online service sales.

khuey 4y ago

> In the end the goal of a company (whether you agree with it our not) is not to get as big as possible but to generate as much cash for its shareholders as possible. Facebook's goal is to do whatever Zuckerberg wants, since he still controls a majority of the votes. It's a fascinating test of the value of corporate governance rights.

urthor 4y ago
^^^ have to emphasize. 60-80% of the cost base in many F500s is bullshit (exceptions exist. FMCG, any industry where physical products make up their balance sheet. Not salaries). Any excuse to avoid returning money to shareholders. Everyone quietly acknowledges. If say, Visa, really tried, they could cut the cost base by 50% and achieve the same output. Carl Icahn style shareholder activists have a point. Forget tech companies. Most public companies are a conspiracy by VPs/C-suite/board. The difference with tech companies is Google feather-beds its EMPLOYEES with free food. From a pure capitalist standpoint. You could run Facebook's business on 20 billion USD in costs. Their cost base is enormous because Z has ZERO interest in cutting costs. He's in it for the ego/vanity. Same as every other F500 CEO/Chairman. Ego is the driver, not the balance sheet.
- mi_lk 4y ago
  there's one quote in Ben Thompson's recent Meta article that I really buy. If you look from this angle many Meta's moves make sense > What is clear is that Zuckerberg in particular seems more committed to VR than ever. It may be the case that he is seen as the founding father of the Metaverse, even as Meta is a potential casualty. https://stratechery.com/2022/meta-meets-microsoft/ https://stratechery.com/2022/meta-meets-microsoft/
  - r00fus 4y ago
    So Zuck is bought into metaverse, but can they transition? My guess is this is going to be a really rough winter / several quarters for Facebook until they reconsider.
    - munk-a 4y ago
      They're throwing loads of technical resources at that - so they should be able to build it - but the problem is the "and they will come part". VR Gaming is awesome, BeatSaber is a wonderful game to engage in... for about an hour or so max - you'll want to shift gears and get your head out of the headset just to relax your eyes. Zuckerberg seems to envision matrix-style VR where it's 24/7 immersive and nobody outside a very small fringe group is at all interested in that proposition. I just fail to see the value proposition of VR socialization over video and even voice calls. If you'll recall even video calls have only really caught on since the pandemic - skype did business pre-pandemic, but it was still a fringe tool for social purposes and much more likely to see use in a work setting. It might be that VR can break into the workplace - but I have my skepticism.
      - deleted 4y ago
        [deleted]
      - chrischen 4y ago
        I don’t fully understand what the metaverse plans are, but if you look at the design of the quest pro that just released then what you say is not true. It’s an AR first device that doesn’t even come with full light blockers that make it usable as a fully immersed VR device. I agree with you VR is not the future but AR definitely is, and even Apple has been making silent but consistent investments in AR for more than the past 5 years.
yieldcrv 4y ago
Exchanges have listing standards related to share composition and size of float They can extend that to these voting class shares imbalances and start a cascade of changes
- modeless 4y ago
  S&P 500 already prohibited multiple share classes. Meta and Google are grandfathered in.
subsubzero 4y ago
Also would like to add that once you go this route(being a value company) rightly or wrongly you just died a little(many perceive this) and recruiting and talent retention becomes alot harder as who wants to work for the tech equivalent of a proctor and gamble or coca cola. Apple did do the dividend a few years back, so maybe a slow pivot could work. But a growth company can only grow so far as all the people who want to use FB's services have used them so its a natural progression for any company like FB.
- Kye 4y ago
  >> "who wants to work for the tech equivalent of a proctor and gamble or coca cola" People who value stability and work-life balance. It's great for people who see a job as a way to fund life and put something away for security later in life, not as a calling they're willing to sacrifice everything for.
mathattack 4y ago
It is, though the currency he lays his employees with is equity. That’s the challenge that Big Tech has to confront. If the stock value falls too much, Zuck won’t be able to convince engineers to join him for the ride.
- sangnoir 4y ago
  The way RSUs are calculated (dollar amount to shares at time of hiring) he'll be able to convince new joiners just fine. Holding onto current employees would be the challenge - assuming he wants to hold onto them in the first place.
  - bagels 4y ago
    Only if they think the stock won't continue the decline.
  - pardesi 4y ago
    Why would new employees (at current quality or better) would join his mission of self-destruction?
    - CoastalCoder 4y ago
      I suspect that many, many software developers would happily help Zuckerberg to implode. Getting paid well is just a bonus.
    - m-ee 4y ago
      I made it through the on-site only to hit the hiring freeze. It’s a well paying remote job even factoring in stock depreciation, moderately interesting work, and I’d happily spend zuck’s money on VR goggles no one needs until it all implodes.
    - loeg 4y ago
      The pay is still good, if not great. My salary is approximately the same as total comp at my previous job. Even with the stock down around $104, my total comp is still some significant chunk better than previous comp (20-30%). (I'm an IC5 SWE.) It will eventually be a problem (in the sense that switching to GOOG or AMZN will be a much better prospect) if the stock continues to go down, of course. And a new hire evaluating their stock package should probably be a little concerned about the trend. The infrastructure to support you getting your work done is great. There are reasonably interesting software problems to solve. There are smart people to work with. There are some good benefits.

brentm 4y ago

That isn't really something a publicly traded company can do without putting even more pressure on it's share price. Mark's also still very young, if he wanted to ride off into the sunset he could have done that a long time ago. I give him a lot of credit for staying in the drivers seat given the political pressure they've been under since 2016 and now this period. It would have been a lot easier for him to just checkout and hang out on a mega yacht all day.

mccorrinall 4y ago
Mark doesn’t give a shit about share price, otherwise there would be buybacks right now. Meta still has a donkey which shits gold: even facebook still had 4% DAU growth yoy, while people make fun about fb using users to tiktok. No, Mark wants a war chest and will increase investments for his meta verse. But I would never bet against Mark.
- Karrot_Kream 4y ago
  > Share repurchases – We repurchased $6.55 billion of our Class A common stock in the third quarter of 2022. As of September 30, 2022, we had $17.78 billion available and authorized for repurchases No buybacks, like this?
- colinmhayes 4y ago
  meta has bought back 5% of its shares this year. Not sure where you got the idea that buybacks aren't happening. They even took long term debt for what I understand to be the first time in order to facilitate more buybacks.
  - deleted 4y ago
    [deleted]
- __MatrixMan__ 4y ago
  The only people I've met who care at all about the metaverse are terrified of it (giving an advertiser live access to metrics like pupil dilation is creepy), or appreciate the opportunities that it creates to make fun of Zuckerberg. Are there people out there who intend to use it? I remember when Facebook was invite-only. It was cool. Everybody wanted in. This... I think this is grounds to bet against Mark.

anonu 4y ago

I don't think there's a time limit on growth. Growth is also market perception based on what P/E multiple the market pays for your share. Value stocks are usually utilities, both actually and figuratively. We all know that Facebook is not a utility nor a necessity. They need growth.

Cwizard 4y ago
I disagree. Growth is an attitude. I worked at startups and at mature companies. In a growth company you usually do not have to justify work in term of profitability but in terms of growth. Then when the company is sufficiently large different management is brought in and the company is made profitable. Budgets are put in place. If you want to get something done, you have to ask for budget, and justify the cost yearly. At least from my experience.

kypro 4y ago

The distinction between "value" and "growth" isn't clear. You can be both a growing company and trading at a value-like multiple. META more than other big tech companies has been scaling back significantly this year and were one of the first to do so. They're also buying back a ton of stock and with operating margins in excess of 80% it's almost insane how conservative they've been with spending money over the years. This is hardly a "growth at all costs" company. This is one of the most profitable companies ever. META also isn't going "all in" on the Metaverse. They're investing a portion of their cashflows on AR/VR technology. The media is so focused on the headset that I think people are missing the fact that in a lot of ways META is inventing the wheel that will support the AR/VR products of the future. Even if they don't make a success of their Metaverse, their technology will still have real value to the ever increasing number of companies operating in this space. TL;DR: META is trading as a value stock, they are cutting back, they are returning a ton of profits to shareholders, and they're not going all in on growth or the Metaverse.

adam_arthur 4y ago
Their expenses are up significantly, there is no cutting back up to this point. A few FAANGs gave lip service to being more frugal, but their earnings releases and operating costs show they were anything but. Part of the reason Meta is crashing is because they are being even more aggressive/spending more on metaverse next year than they previously stated. 19% growth in costs while having -4% revenue over the year ago quarter. https://investor.fb.com/investor-news/press-release-details/2022/Meta-Reports-Third-Quarter-2022-Results/default.aspx https://investor.fb.com/investor-news/press-release-details/...
- kypro 4y ago
  A little late here, but want to say you're correct. I thought they were cutting back on Metaverse R&D a bit, but clearly not.

missedthecue 4y ago

META share buybacks last four quarters June 30, 2022: $5.233B March 31, 2022: $9.506B December 31, 2021: $20.06B September 30, 2021: $13.46B

impulser_ 4y ago

You can see how much Google spends and makes on everything outside ads and cloud. They report it as "Other bets" on their financial reports. Last Q they made 209m in revenue on other bets, and lost 1.6b on those bets. The only profitable business for Google is Ads. Cloud, and other bets burn about 3b dollars every Q.

blinding-streak 4y ago
Incorrect. Google has a line item called "Google other" that is $7B in the most recent quarter. It accounts for things like Google Play revenue, YouTube and YT TV subscriptions, hardware revenue from Pixel, nest, etc. They don't report profitability from this line item. But obviously something like Google Play margins will be very high. And they're probably losing money on the hardware.
- oars 4y ago
  Thank you for explaining "Google other" on the financial statement.

altdataseller 4y ago

They did buy back stock in the past few years

Cwizard 4y ago
Ok, I didn’t know. I sold most of my facebook stock late 2019. And haven’t really looked at the company since.

andsoitis 4y ago

> After almost 20 years of doing business isn’t it about time that Facebook starts to position itself as a value company rather than a growth company? and > the journey ends and you have to reorient the business (imo) Isn't that the point of reorienting themselves to the meta verse. It is a new, unconquered land with virtually unlimited space and possibility? Arguing against myself now: while this might be true from a product standpoint, their business is advertising, so unless they find other ways to monetize, the growth rate is limited by advertising dollars / share.

bitL 4y ago

Being one of the largest companies in the world, they are definitely treated as value stock by investors already.

pardesi 4y ago

A company needs to be valuable today with growth investments that can make it more valuable over time. That is what a stock valuation is. If Zuck had raised bonds or sold his stocks & funded his Meta madness, then he could have used the current cash flow into improving the operations of the current business, improve the margin & manage business threats to maintain the market position. He is definitely a kid without any adult supervision at this point.

Firmwarrior 4y ago

> In the end the goal of a company (whether you agree with it our not) is not to get as big as possible but to generate as much cash for its shareholders as possible Man, why does everyone have the same values nowadays as Milton Friedman and The Warthog? Relevant video clip: (NSFW, very offensive language) https://youtu.be/7j1850-qlm8?t=19 https://youtu.be/7j1850-qlm8?t=19 Facebook's (stated) mission isn't to make money or get big, it's to bring people together. If they can make VR user-friendly and ubiquitous, I think that will serve their stated goal. If Facebook just decided to hunker down and count their money, they'd be doomed to eventually fade away just like so many tech juggernauts have in the past.

_carbyau_ 4y ago
> Facebook's (stated) mission isn't to make money or get big, it's to bring people together. The business plan so far seems to be: 1. Make VR work 2. ??? 3. People come together! Smallprint: make lots of money along the way... I am interested as to whether there exists a concrete plan for step 2 but I am dubious of this direction.
- paganel 4y ago
  > 3. People come together! Difficult to make them come together without throwing up, literally. I almost got to the point where only thinking about the abstract concept of VR makes me a little dizzy. But the logic goes something like this: Zuckerberg has built a $1 trillion company already => he knows what he's doing => we should trust him with the tens of billions of dollars he's throwing at this, trust him that is compared to the schmucks that say that this won't go anywhere, they haven't built $1 trillion companies themselves. I predict that around the mark of $100-150 billion thrown down the VR drain some share-holders will actually start to throw some hard questions at Zuckerberg, and in another one or two years after this the project will have the fate of Google+.
  - Firmwarrior 4y ago
    I dunno if Facebook is going to make it there, but I think their goal for VR is feasible and achievable. All the functionality is there on their platform and others right now, but it's too slow to boot up and not polished enough yet. Unfortunately, tiny performance hiccups in VR will immediately nauseate most people, not to mention the friction of having to put on the headset, boot it up, navigate through slow menus, launch an app, log into a room... If you could toss on your VR helmet for 2 minutes to pop into VR and chat with someone the way you can open a Zoom call today, it'd be a huge quality of life improvement for remote work. Or like Carmack was saying recently, you could get to a point where it's cheaper to mail out a thousand headsets than to host a conference in person Tangential edit: Man, how nuts is it that Facebook is throwing billions of dollars a year into this? Palmer Luckey invented modern VR in his spare time as a kid living in a trailer next to his parents' house. You've got VR startups out there making interesting devices, amazing multi-user worlds, and all sorts of other things for a few million bucks per company. It makes sense that if they have the money they should try to do something useful with it, and silicon valley engineers/hardware development don't come cheap, but that's just such an incredible amount of money.

scarface74 4y ago

Both Apple and Microsoft are 45+ year old tech companies. Look where they were in the mid 90s when they were already 20 years old compared to where they are now.

Cwizard 4y ago
I am not saying Facebook should stop growing. It should just not keep dumping money in these unproven projects, and they should get some people on board to fix their cost structure. Apple and Microsoft are much more mature companies than Facebook is. Microsoft had major restructuring a couple of years ago. And I think Apple also had some major reforms internally around 2015-16 to make its operations more efficient. Apple accumulated a massive amount of cash over that period. I am not as much into it anymore as I sold most of my holdings near the end of the pandemic. So maybe things have changed since then. Netflix is another company I have serious questions about. Not sure about their current situation but around 2017 when I looked into them, they were essentially a company that sells you a dollar for 99c. Their ratio internal content/external content was not high enough which meant they had massive recurring licensing costs which they funded by a mix of subscriptions revenue and debt (a lot of debt). The story was that that would be ok once they reached ‘scale’ as costs would be the same but they would have more subs. In my opinion that logic is flawed since presumably the cost of the licensing deals will also rise as more players entered the market and content holders got less money from traditional sources (because everyone uses those subscriptions services now). Netflix made sense when they were able to buy the content for cheap because they were niche. My opinion of course. Im just a random dude on the internet.
- scarface74 4y ago
  > I am not saying Facebook should stop growing. It should just not keep dumping money in these unproven projects, On the Apple side, the iPod, iTunes, the iPhone, the iPad, and the watch were all unproven projects. On the Microsoft side, giving up immediate revenue from selling Office for $600 - seat into a subscription service for $69-$99 a year had to be a short term revenue hit. Not to mention XBox which loss billions before becoming successful and Azure. Meta doesn’t have a choice. I really hate the Facebook product. Not because of the privacy angle, it commits the worse sin of any product - it just sucks now. Most of the post I see aren’t even from people let alone brands and websites I chose to follow.