Analysis: Facebook breaks no sweat as it takes over world
REMEMBER that kid in high school with flawless skin, straight-A grades and a gorgeous jump shot? The one who did everything perfectly, and you envied/hated her for it? Facebook is that kid.
While the rest of the tech superpowers have been flop sweating recently through their quarterly earnings reports, Facebook just breezed by, struck a glamorous pose for its promposal Instagram photos and collected its garlands.
The company in the first quarter posted its fastest rate of revenue growth since 2014 at 51.9 percent, even though Facebook has almost doubled the sales it had two years ago. Its user base is bigger than the population of China, and yet more people are becoming citizens of Planet Facebook.
After seeing Facebook stumble its way through its 2012 initial public offering, it would have been hard to imagine four years later that Facebook would be the best managed of the large tech companies.
Mark Zuckerberg in January described his repeatable blueprint for turning his social networks into businesses with $20 billion (R288bn) in annual sales. First the company made a cool digital hangout. Then it invited businesses.
“And then only once you have that ramped up to a good scale can you really start dialling up advertising,” Zuckerberg said.
His company has pulled off this play so far with its main social network, and the same formula seems to be working with Instagram, which opened to all advertisers a few months ago.
It is too soon to tell whether the Zuckerberg playbook will work for Messenger, WhatsApp, or its nascent live video offering. But given the company’s success so far, it should get the benefit of the doubt.
As Apple once did, Facebook has both torrid sales growth and impressive profits. Unlike Apple, Facebook has a line-up of money-making opportunities to keep its motion machine going.