Facebook Eyes the ‘Next 5 Billion’

by Matt Klassen on September 13, 2013

When Facebook’s initial public offering went quickly off the rails in 2012, a disturbing downturn that saw the social network’s elaborate house of cards tumble around its ears, there were no shortage of critics regarding the company’s slapdash revenue strategy, particularly as it related to mobile and advertising. But since the company’s second-quarter earnings report in July, the social network has seen investor confidence grow, and the company’s stock price along with it.

In fact, such was the message of Mark Zuckerberg earlier this week when he appeared at TechCrunch Disrupt earlier this week, acknowledging his initial trepidation at taking Facebook public and noting that early on the company really didn’t have a reasonable mobile strategy in place.

But times are changing, Zuckerberg said, and with the social network’s mobile product now accounting for 40 percent of the company’s revenue, its time to look forward to the company’s next big goal: connecting the next 5 billion.

On the day Facebook’s stock hit a new all-time high of $45.09, Zuckerberg once again took to the stage at TechCrunch’s annual Disrupt event to discuss the current status and future direction of his company, with some thoughts of the ongoing NSA PRISM scandal thrown in for good measure.

Acknowledging Facebook’s struggles since going public, Zuckerberg noted that his company has got its mobile ducks in row and that the company’s mobile presence now accounts for a growing percentage of the company’s revenues as more and more users access Facebook from their phones and tablets. And there certainly are a lot of users, as Zuckerberg said the most recent numbers show 1.15 billion monthly active users, of which 699 million are daily users.

But Zuckerberg’s focus isn’t really on the company’s present, but on its future, a future the social network’s wunderkind says involves finding ways to reach the next 5 billion people on this earth, no small task given that the vast majority of those potential Facebookers lack have one vital component: internet access.

In fact, connecting the next billions isn’t a focus of Facebook alone, but of every major tech and mobile brand out there, as given the market saturation of the developed world, it’s those emerging markets that will offer company’s like Facebook continued revenue streams.

But as we’ve said here before, connecting those billions is really a Catch-22, as technology will need to be extremely affordable, offering lower profit margins to company’s who will need to invest billions to establish the necessary wireless network infrastructure to be able to use the phones—and Facebook—in the first place, not an ideal strategy for yielding the revenues these company’s are used too.

In the end, it does look like Facebook has cleared the one major hurdle that has plagued the company this past year, its lack of a coherent and comprehensive mobile strategy. With that in place, Facebook is well positioned to look forward towards capturing the hearts and minds of the rest of the world, just as we here in the developed markets start to lose interest.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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