‘Social Media has peaked’: Facebook in free fall
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‘Social Media has peaked’: Facebook in free fall
FACEBOOK shares went into a free fall Thursday (AEST) as a stunningly weak financial outlook raised fresh concerns for the social networking giant as it tries to recover from the impact of data protection scandals and investigations.
After-hours trade saw Facebook shares plunge by some 21 per cent, wiping out an estimated $US130 billion in market value if the slump is confirmed at Thursday’s market opening.
The second-quarter report sparked initial selling after it showed revenue and user growth came up short of expectations.
Profit was up 31 per cent in the second quarter at $US5.1 billion; revenues rose 42 per cent to $US13.2 billion, slightly below most forecasts.
Selling pressure accelerated when chief financial officer David Wehner warned in a call with analysts of a weaker outlook in the coming quarter.
Wehner said revenue growth “decelerated” in the second quarter and will decline “by high single digit percentages” and added that “we are also giving people who use our services more choices around data privacy which may have an impact on our revenue growth.”
On the call, Jefferies & Co. analyst Brent Thill said that “many investors are having a hard time reconciling that deceleration … It just seems like the magnitude is beyond anything we’ve seen.”
Ross Gerber, an analyst at Gerber Kawasaki, said the latest figures suggest that the tide may be turning for Facebook and other social networks.
“Social Media has peaked,” Gerber said on Twitter. “We told you last qtr and now we’re seeing it.”
full story
https://www.news.com.au/technology/online/social/social-media-has-peaked-facebook-in-free-fall-as-weak-outlook-stuns-market/news-story/c6c9afb2f783cba7198e8346c514caad
veya_victaous- The Mod Loki, Minister of Chaos & Candy, Emperor of the Southern Realms, Captain Kangaroo
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Re: ‘Social Media has peaked’: Facebook in free fall
"Social media", video "streaming" and "internet search engine" companies depend on advertising revenue as their main source of income, well ahead of subscriptions and other charges...
And with Facebook, Google, Twitter, Instagram and others all competing for the same limited pool of advertising funds, it should have been obvious to any neutral and level-headed observers watching their performance, that their revenue streams had to hit their limits eventually..
Pretty much the same effect as they have had on the "traditional" news&information media (newspapers, television, radio, books and magazines..) over the last two decades.
'Wolfie- Forum Detective ????♀️
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Re: ‘Social Media has peaked’: Facebook in free fall
I agree, the value of facebook is ridiculous based on potential advertising revenue.
Google is a bit of an exception, the fact it has the Android OS and related 'ecosystem' does put it inline with Microsoft and Apple as well. It does have a diverse business model.
Which is part of the reason Facebook is so overvalued, it's a one trick pony. And is technologically dependent on MS, Apple and Google to even be able to offer a product to customers, it runs on their software and devices.
Google is a bit of an exception, the fact it has the Android OS and related 'ecosystem' does put it inline with Microsoft and Apple as well. It does have a diverse business model.
Which is part of the reason Facebook is so overvalued, it's a one trick pony. And is technologically dependent on MS, Apple and Google to even be able to offer a product to customers, it runs on their software and devices.
veya_victaous- The Mod Loki, Minister of Chaos & Candy, Emperor of the Southern Realms, Captain Kangaroo
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