To paraphrase Mark Twain, it seems the rumors of the demise of Facebook have been greatly exaggerated. The stock traded at an all-time high this past Monday, just before Christmas, and the company's market cap is $227.7 billion, according to Yahoo Finance.
Compare and contrast that with recent stories such as this post by Ashley Feinberg in Gizmodo saying it's time to start fresh as "time and bloat have turned once-beloved font of nostalgia into an onslaught of faux-sentimental sludge from strangers."
Researchers find teens have abandoned Facebook in favor of other social media, and the Pew Internet and American Life Project says as many as 61 percent of Facebook members have tuned out the website for weeks and sometimes months at a time.
Still, investors are buying into Mark Zuckerberg's vision, and it has been quite a spectacular 2014 for Facebook, as this piece in Business Insider states.
Facebook's Fantastic Year
Here is a little review. In a play to dominate messaging on phones and the web, in February Facebook acquired WhatsApp, the most popular messaging app for smartphones, for around $22 billion.
Similar to traditional text messaging, WhatsApp allows people to connect via their cellphones. But WhatsApp sends the actual messages over mobile broadband. That makes it particularly cost effective for communicating with people overseas, and twice as many messages are sent over the mobile Internet than via traditional texts, according to Deloitte.
Soon after that, Facebook announced it would buy Oculus VR, a virtual reality technology company for $2 billion.
"Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow," Facebook founder and CEO Mark Zuckerberg said at the time. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate...Our mission is to make the world more open and connected. For the past few years, this has mostly meant building mobile apps that help you share with the people you care about. We have a lot more to do on mobile, but at this point we feel we're in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences."
Mobile Ad Spend
Instagram, which Facebook bought for $1 billion in 2012, is now valued at $35 billion by analysts at Citi. Instagram has hit the 300 million user milestone, compared to Twitter's 284 million "active monthly users." Instagram has started to experiment with ads, and that could be a major source of revenue growth.
Overall, mobile ad sales are projected to jump 46 percent to $3.78 billion in the fourth quarter of this year, according to the average of analysts estimates compiled by Bloomberg. Mobile promotions accounted for 66 percent of ad sales last quarter, up from 62 percent in the prior period and 59 percent in the first quarter.
Bloomberg also reports marketers have been paying more dollars for fewer ads. Higher-quality ads, improved targeting and premium video advertising, has allowed Facebook to more than triple prices for promotions in the last quarter compared with a year earlier.
According to EMarketer, Facebook is projected to account for 8 percent of the $140.7 billion global ad market this year, up from 5.8 percent in 2013.
Facebook "now captures around three times as much revenue as Google from mobile graphical and video ads in markets like the U.S.," according to Amir Efrati at The Information.
A 2013 study from University of Michigan psychologist Ethan Kross argues that frequent Facebook use makes us "sad" and "unhappy." That's certainly not true if you are a Facebook investor. It looks to be a very Merry Christmas, as well as a Happy New Year.