How Facebook Is Like Apple
The following video is part of our "Motley Fool Conversations" series, in which we talk about topics around the investing world. This time, Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova talks about the one number that stands out when evaluating the prospects for a recovery in Facebook's (NYS: FB) share price.
In the hubbub over the social network's valuation and competition from the likes of Google (NAS: GOOG) , we've forgotten just how much Facebook is like Apple (NAS: AAPL) . Both companies prize vertical integration as a means to control and ultimately refine the user experience.
"In 2011, we began serving our products from data centers owned by Facebook using servers specifically designed for us," Facebook says in its most recent S-1 filing. "We plan to continue to significantly expand the size of our infrastructure, primarily through data centers that we design and own."
"Expanding infrastructure" could mean a lot of things other than data center construction, including advanced hardware and chip design. Why would Facebook touch either area? Data processing. The more information the social network processes, the greater its opportunity to profit from a worldwide base of 900 million active users. Yet cashing in won't come easy. Watch the following video for more.
While much of the tech world is obsessing over Facebook's IPO, there's another newly public social-media company that looks even more promising. Forget Facebook -- Here's the Tech IPO You Should Be Buying, because this social butterfly has a much more reliable monetization model and isn't as vulnerable to the fickle budgets of advertisers. Do yourself a favor and grab a free copy of this report while it's still available.
At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim'sWeb home,portfolio holdings, andFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Google and Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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