Facebook Financials & The Future of Social Media
Undoubtedly, Facebook is the clear leader when it comes to social media so it’s not surprising that investors are keeping a close eye on the financial health of the world’s largest online community especially in light of the upcoming IPO As a social media consulting firm, we make it our business to understand the growth potential of every major player in the field but why would this be of interest to the average small business owner? There are actually several reasons:
1. The future of social media marketing will continue to exert immense influence on all forms of advertising and marketing for business entities of every size.
2. Investors are watching the rise of social media sites very closely especially in light of such large IPO’s. The associated traffic, contacts and monetary assets claimed by sites such as Facebook will have direct impact on other business entities as they grow their own connections.
3. The monetization of online assets is expected to become as “real” in a fiscal sense as Intellectual Property (ie, patents, trademarks and copyrights) is for most business forms. One day in the future, don’t be surprised to find that the number of online assets (ie, connections, contacts and relationships) is valued in much the same way.
Amended IPO Results Demonstrate Strong Growth
Facebook announced an amendment to the original S-1 filing on Monday. The very fact that an amendment was already required is just one more example of how rapidly the social media giant continues to grow; just a few months ago the original S-1 was released in anticipation of the upcoming IPO and demonstrated 800 Billion users and $943 million in Q4 of 2011. Today the site already boasts 900 Billion users (expected to reach the big T by this summer!) and $872 million for Q1 (as compared to $731 million in Q1 of 2011).
While these types of numbers sound impressive enough…skeptics might wonder what the net profits are for such a young company. After all, it’s not unusual to see start-up’s losing money for years despite boasting substantial revenues. Not so with Facebook; net income was a healthy $205 million for Q1…roughly 20% of total revenue thanks in part to the healthy margins made possible via social media. As for the total number of users; 532 million – of the 900 million total users – are active DAILY users. Mobile users have now surpassed the half billion mark demonstrating strong growth in what Zuckerburg deems the future of social media…mobile.
Up, Up & Away
Great. So Facebook revenue is up 45% over last year at this time (wow! Impressive by any standard) but how healthy is the company? Quite healthy! It appears ad revenue continues to account for the majority of most income at $872 million. Wondering what that translate into per user? How about $1.21…the average revenue for each registered user. Not shabby for a company that didn’t even exist just a few years ago. This type of direct valuation per user is exactly the type of information which will transform the social media marketing space for big business and small business users alike. Remember a few weeks ago when we ran an article about calculating the actual cost or ROI of a social media marketing campaign? These are the types of numbers which allow business owners to extract exact amounts for new client connections while still fine-tuning results based upon individual industry and usage patterns in mature campaigns.
Other News on the Facebook Front
Photo Changes! In other news, Facebook’s Timeline for business image is scheduled for April 26th. For those with a closely crafted visual display, be aware and prepared for the upcoming change! The new profile picture will be 160×160 pixels…no more and no less.
Email Sync. This one has some people a bit up in arms while others welcome the ability to integrate all those various email alias’ into one central location. Whether you love it or hate it, it’s coming. Facebook will sync Hotmail, Yahoo, Gmail and other email addresses with your Facebook name.
More Social Media Updates
And finally, there are some other happenings in the social media sphere worthy of mentioning. Pinterest is now confirmed to be the 3rd most popular social media site on the Internet according to the 2012 Digital Marketer study. Wow – what to go Pinterest! For those small business owners that have been sitting on the sidelines over the past several months waiting to see what would happen with Pinterest, we think you will agree with our initial suggestion to get in early and stake your claim! Pinterest has continued to attract user interest thanks to a strong marketing campaign, enhanced visual interest and organic exponential growth.
Klout is trying out brand pages! You heard it here first! The social scoring company is currently trying out brand pages (which they are currently calling “squads”) in order to allow people and companies to connect with one another. The initial offering is limited to a few select big business brands like Red Bull but depending upon initial results, may become a significant upgrade to small business owners in the future.
Last but not least, Tumblr, is finally adding a much needed “featured” section which will allow advertisers to purchase advertisements. Again, while this is expected to be fairly limited in the initial offering, it’s a step in the right direction and one more method of monetizing the nearly 120,000 impressions per day.