Popfy Skribbles - Facebook’s Q3 Earnings

Sitting here thinking about Facebook’s Q3 earnings announcement and what it spells out regarding the future of the social media space…

For years, we’ve been hearing a little bit of everything about Facebook ($FB), the popular social network. Everybody has formed their opinion regarding the service, for better or worse. Users play with the juggernaut in different ways. Companies use it to promote their brand and adults/millennials use it to create content or just to consume content better known as being nosy! LOL. What about teens? We’ll touch on them in a minute.

Revenues, Revenues, Revenues On yesterday, October 30, 2013, $FB reported quarterly earnings (Q3) that blew past Wall Street estimates. The financial announcement said that its revenue soared 60% to $2.02 billi (investors expected $1.91 billi) and it pulled in $621 milli in profit. Investors got high over the news and boosted its stock 15 percent to over $56, a new 52-week high.
Mobile Cash Cow Mobile is a HUGE part of $FB’s money hustle. Everyday 728 million people use the social media giant, with 507 million logging onto mobile. Those 507 million mobile users were responsible for a whopping 49 percent of its advertising revenue or, 880 mill.

Teenage Drama For the feelings were the same, now here’s the score
You love him too much, and they don’t love you anymore
-Slick Rick, "Teenage Love"

Rick the Ruler’s lyrics sums up the relationship that $FB has with teens. The social media service was once cool amongst the fickle group. However, after $FB made its financial announcement, and its stock soaring, it painfully revealed that during the July-September quarter it saw a decrease in daily usage among teens. The news sent its stock spiraling downwards the next morning, erasing all of the gains it made the previous evening. Teens have not been shy about saying that Facebook has too many parents and other adults so they have taken their social media thirst elsewhere. Can you blame them? A recent Piper Jaffray report said Twitter has become teens' favorite social site. Don’t forget about Snapchat, Tumblr, and, Instagram (a $FB company), other social sites that they spend a lot of their time on.
Future Growth As reflected in its earnings, Facebook’s mobile and financial growth rests in advertising. Don’t worry, your news feed isn’t going to be spammed-out and your privacy, FWIW, should still be intact. It is borrowing moves from Twitter ($TWTR), one of its main rivals, to make its site more appealing to advertisers. $FBs focus on advertising isn’t going to be easy. Advertisers on $FB don’t feel their ads are as effective as other social media sites like Google ($GOOG) and that they are getting their money’s worth. Also, more competition is coming as $TWTR is building up its advertising operations as it prepares for its stock exchange debut. This is definitely a major development to keep our eyes on.
Earnings Impact on Twitter $FBs earnings announcement was a big day for the social media space. The big winner however, is $TWTR, who is going public next week. The anticipation and demand for the microblogging service’s public offering is on crazy overload. It’s going to be a big test to see how bubbly the markets really are!