What's Not to Like About Facebook?
If you have visited Facebook at some point since its inception 10 years ago, you've likely seen pictures of a "friend's" dinner, orstumbled upon an ongoing personal discussion that really didn't need to be posted for the world to see. Turns out, there actually is something to dislike about Facebook, even after its stellar quarter and year: oversharing.
A new Pew Research Center survey found that 36% of Facebook users who filled out the questionnaire cited oversharing as something they "strongly dislike." That was equal to the number of survey respondents who strongly objected to people posting information or pictures of them without permission.
But none of this has stopped young and old alike from using Facebook, and with some new tricks up his sleeve CEO Mark Zuckerberg is taking strides to ensure it stays that way.
A lot of ducks in a row
The gaudy numbers Facebook shared during last week's earnings announcement certainly warrant its 17% jump in share price since Jan. 29's close of $53.53 a share. Along with its impressive financial growth, Facebook continues to gain active new users, both daily and monthly; nearly 75% of them are accessing Facebook via mobile devices. According to Pew Research, some 71% of all adults connected to the Internet use Facebook.
From an advertising perspective, Facebook also holds sway over rivals such as Twitter based on its varied demographic. Even as Twitter's stock price borders on the insane, it's Facebook that has what advertisers want, and that's why its valuation is sustainable. Sure, Twitter is big with "younger adults, urban dwellers, and non-whites," according to Pew Research, but then so is Facebook, despite some news to the contrary, as is Instagram.
And just imagine when Facebook is able to fully integrate its video ad solutions to tap into Instagram's rapidly growing user base? This past quarter was the first with Instagram ads, so that revenue source in and of itself should pop. Now toss costly video ads into the mix, and the Facebook engine should keep gaining steam.
Not resting on its laurels
Even after its unlikely stock price run, Twitter is still the runt of the social media litter. But that hasn't prevented Zuckerberg from pursuing a tweet-like user strategy. Following the recent Super Bowl rout, Facebook said there were 50 million users on the site during the game, and they "interacted" about 185 million times. Facebook added that about half the viewers of the big Ggame were "chatting" about it. If that sounds very Twitter-like, you're right. And it wasn't an accident.
In its efforts to expand the user's level of engagement, Facebook incentivized athletes and entertainment folk to post public content in exchange for exposure. Why would Facebook take steps to become more like Twitter? Because, if Facebook is able to improve and lengthen user engagement, it will increase the number of ads each is exposed to, and thus revenue keeps soaring.
In the same vein as improving user engagement, Facebook on Monday introduced the Paper app that is designed to make the news feed easier to read, and more personalized based on each user's likes and dislikes. The notion of Paper speaks directly to Zuckerberg's objective of essentially personalizing each user's experience based on the mounds of data at Facebook's fingertips, and he just got one step closer with the new app. Some scoffed when Zuckerberg suggested that one day Facebook would become "the best personalized newspaper in the world," but it's moving in the right direction.
Final Foolish thoughts
Logging into Facebook and seeing yet another post describing a day in the life of your "friend's" dog may be annoying, but Facebook certainly doesn't mind. Its compilation of user data is massive and growing by the day, and it's apparent Facebook knows how to use sometimes overshared information to generate revenue. Yes, Facebook's valuation is getting a bit lofty for some, but that's short-term thinking for a long-term opportunity.
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The article What's Not to Like About Facebook? originally appeared on Fool.com.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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