FB Stock Could Soar Thanks to Scale, Data
Facebook (FB) has proven it can quickly adapt to dramatic changes in technology. When the company came public in May 2012, its mobile strategy was in disarray and FB stock suffered. But CEO Mark Zuckerberg acted swiftly to move his organization. The result: Facebook is now the king of mobile.
This is certainly a great position to hold, and it’s been a large driver for FB stock. According to research from Gartner, the mobile ad market is forecast to jump from $13.1 billion in 2013 to $18 billion by 2014. In fact, by 2017, the estimate is for the market is to reach a whopping $41.9 billion
No doubt, FB has some huge advantages … like an extensive database on user behavior, which makes it easier to target ads, along with tremendous scale. Facebook boasts about 874 million mobile monthly active users. For global brands like Walmart (WMT), Nike (NKE) and GM (GM), Facebook offers a way to put together broad-based mobile ad campaigns.
Plus, another boost for Facebook stock could come from a mobile ad network. Right now, Facebook gets its revenues only from its own platform … but why not expand to other mobile apps? The idea seems like a slam dunk, as Facebook has all the ingredients for a mobile ad network, such as a software development platform (with its Parse division), core ad technologies (there is the FBX ad network for the desktop) and features like Facebook logins (which pull in data to mobile apps).
Oh, and Facebook can leverage its Instagram property as well. Advertising for Instagram remains in the early stages but there is certainly tremendous potential for monetization, which could carry FB stock even higher.