Social Media Means
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Will Facebook be around in 10 years?

Expect that to continue in the next decade as low single-digit growth in new users is likely more realistic over the very long term (10 years or more). ... Online social interactions, ads, and average revenue per user. Year-End Period Monthly Active Users Increase (YOY) 2019 2.50 billion 8% 7 more rows •

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Do viral videos make money?

For perspective, remember that the creator fund pays around 2 to 4 cents per 1,000 views. That means, if your video had one million views, you...

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What is a variable in statistics?
What is a variable in statistics?

A variable is a characteristic that can be measured and that can assume different values. Height, age, income, province or country of birth, grades...

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Facebook (META -3.54%) stock has had an epic run since its public debut in 2012. Shares have surged nearly 450%, driven by massive global additions to active subscribers and dominance in online advertising -- with Alphabet's Google making up the other half of the virtual duopoly. Over the last few years, though, Facebook has been dealing with some well-documented woes. There was some backlash after reports that user account information was improperly accessed by political consulting firms during the 2016 presidential elections. There has been more recent criticism from politicians over the type of campaign advertising the social media giant allows, and talk of whether U.S. antitrust investigators might eventually force a breakup of the company (which also owns Instagram, WhatsApp, and Messenger). Facebook has thus far been able to withstand the criticism. And while ads make up the bulk of its revenue right now, the groundwork is being laid for a more diversified business. In 10 years, much of Facebook's operation will likely look similar to what it is right now. But the services available through one of the company's social apps should be far more diverse.

Online social interactions, ads, and average revenue per user

Facebook has turned into a cash-generating monster over the last few years. Revenue has grown over 1,800% since 2012, clocking in at $71.0 billion in 2019. Free cash flow has been equally impressive, increasing 2,150% to end 2019 at $21.1 billion. Facebook's user count expansion is one of the key ingredients to its meteoric rise. Year-End Period Monthly Active Users Increase (YOY) 2012 1.06 billion 25% 2013 1.23 billion 16% 2014 1.39 billion 13% 2015 1.59 billion 14% 2016 1.86 billion 17% 2017 2.13 billion 14% 2018 2.32 billion 9% 2019 2.50 billion 8% Now with over 2.5 billion monthly active users of one of its apps, it's no surprise that growth in this important metric is slowing down into the high single-digit percentages the last couple of years. Expect that to continue in the next decade as low single-digit growth in new users is likely more realistic over the very long term (10 years or more). But as Facebook has proved, new users aren't the only way to grow. CEO Mark Zuckerberg and his management team expect the top line to keep expanding north of 20% for the foreseeable future even though user additions are decelerating. The new key ingredient is average revenue per user (ARPU). Back in the fourth quarter of 2012, Facebook's global ARPU was a mere $1.54, compared with $8.52 in Q4 2019. The massive gain is a result of the company primarily figuring out how to better deliver ads and provide a lucrative platform for its advertising partners -- although the "other" segment, primarily Oculus virtual reality (VR), has also been steadily growing by double digits and hauled in about $1 billion in revenue in 2019. ARPU is the metric to watch in the next decade at Facebook. It still has a lot of room to run in emerging markets. At the end of 2019, ARPU was a whopping $41.41 in Facebook's most mature North America geography. Over in Europe, where regulatory scrutiny is higher than here at home, ARPU was $13.21. That compares with just $3.57 in Asia-Pacific and $2.48 everywhere else. Put simply, Facebook has a lot of room to grow as emerging economies continue to develop.

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Okinawa, Japan According to Blue Zones, the people living in Okinawa are fortunate enough to have extremely low rates of cancer, heart disease, and...

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What are social media key points?

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Looking beyond the controversy

Facebook's business being tilted so much toward advertising is what frequently comes under the microscope, though, so let's assume that increasing ARPU from ads doesn't end up being the tailwind it has been the last eight years. That's OK. When it comes to consumer/business interaction, there's more going on than just advertising. Facebook isn't blind to this fact, either. On the last quarterly earnings call, Zuckerberg outlined some of the work his company is doing to diversify. Much of that work at the moment is going toward helping users control privacy and access to their personal information. A large chunk of the $30.9 billion in expenses in 2018 and $46.8 billion in 2019 went toward various privacy updates and regulatory compliance. And Zuckerberg said other features are in the works: a private social platform for more intimate interactions, e-commerce, and payments, and a cloud computing platform. Among those efforts is WhatsApp Payments, which will start rolling out to new countries the first half of 2020 (it's been testing in India since 2018). Also, there are new tools for small businesses and entrepreneurs to sell and accept payments online, the development of a next-gen AR/VR computing platform via Oculus that goes beyond delivering video games and entertainment, and messaging tools for business employees to communicate with one another and customers. With 8 million paying advertisers and more than 140 million businesses using at least one free-to-use Facebook tool at the end of 2019, there's plenty of open space to keep growing. All the talk about Facebook right now is centered on social issues, but I believe that will subside in time. The company is already a cloud computing giant geared toward its ad platform, and it's dumping a lot of investment dollars into growing its ecosystem of cloud-based tools for users and businesses alike. Paired with its dominance in selling advertising, there's a lot to like about Facebook as an investment over the next 10 years.

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