How Facebook Can Avoid Failure
The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino discusses topics across the investing world.
A lot of the focus on the Facebook IPO has centered around the first-day pop, or lack thereof, but long-term investors should be much more focused on the fundamentals of the business. Can a social network make money over the long haul? In the past we've seen MySpace fail miserably as users became uncomfortable with salacious advertising and the constant experimentation that actually stunted its evolution. If Facebook is to serve as the modern-day town square, do we want it to resemble New York's Times Square? Investors should consider the various paths Facebook can take. If MySpace became New York's Times Square, where passersby gawk at the advertising but are reluctant to linger, can Facebook avoid this fate and find other avenues for revenue growth? Isaac offers up his suggestions to bolster the bottom line in the video below.
Facebook recently became the largest company ever to IPO. Yet all the buzz around this social media monster could prove off base, as Facebook has deep problems converting its millions of members to revenue. We've created a new report, "Forget Facebook -- Here's the Tech IPO You Should Be Buying," which details a much better social media stock that has a longer runway for growth than Facebook. The report won't be available forever, so click here to get access today -- it's totally free.
At the time this article was published Isaac Pinohas no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com and Google.Motley Fool newsletter services recommendAmazon.com, eBay, and Google. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.