Facebook action price collapse, but "the company is not close to collapse"



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Facebook does not meet market expectations for a quarter and the stock market value plummets. Are these the first cracks in Zuckerberg's successful social media empire? No, says analyst Wim Zwanenburg, it is far from being done with growth. "It's not like Facebook was about to collapse."

The investment strategist thinks that the 18% drop after the disappointing numbers is an exaggerated market reaction. The numbers were perhaps worse than what investors hoped for, but the company's growth is still fast, despite the Cambridge Analytica scandal and the upheavals that have occurred

Indeed: the turnover of business has not progressed as expected in the last quarter. Just like the number of users. In Europe, there has even been a decline. In the coming months, Facebook's growth will continue to slow down, the CFO said in an explanation of the results.

See also: Facebook hard hard on Wall Street

This sounds alarming, but it's according to Zwanenburg useless. "Some say: it's the canary in the coal mine, which is exaggerated, and Facebook has set a historic record before the quarterly numbers," says Zwanenburg.

"And even now, it has not been done with growth, it only goes with percentages a little lower."

Beginning of the end

But another expert thinks the opposite. Sonja Loth, social media strategist and director of SOCIAL.INC, sees this as the beginning of the end of Facebook.

His company advises large companies on how to use social media to reach their potential customers. And recently, she sees a change in demand

"People are no longer saying that they want to focus primarily on Facebook to reach their target audience, now they say Instagram or YouTube, and I do not have it. have never seen before. "

On which term does Facebook come down? "Until now, every network has turned out to be temporary, but Facebook will still be at least ten years old."

Advertisements

On the 13.2 billion business figure that Facebook recorded in the last quarter, 98.5% from ads. And these ads want to continue serving the company to as many users as possible. Even if the number of users in Europe decreases and that number in North America remains the same: there is a growth in the whole world

And then there is those other companies that are part of the Facebook family that can also make money.

In explaining the numbers, Zuckerberg made new data available on this family. Because the Facebook, Facebook Messenger, Whatsapp and Instagram platforms are used by 2.5 billion people each month.

But these 2.5 billion people can use multiple services. This means that there are 2.2 billion Facebook users, 1 billion Instagram users, 1.5 billion users of Whatsapp and 1.3 billion Facebook email users

Instagram

Instagram has been doing very well for ages growth figures, especially among young people. Earlier this year, this also emerged from a social media survey in the Netherlands conducted by the Newcom research agency. And that's partly to the detriment of Facebook. Because especially in young people up to 20 years old, the field is losing.

Facebook bought the popular social network in 2012 for an amount of 1 billion euros. An excellent investment, because if the company had continued independently, it would have been worth $ 100 billion, Bloomberg calculated last month.

New Growth Engine

According to Zwanenburg, Instagram is the new engine of growth. "You see that young people have often switched to Instagram, because there is more interest in photo and video culture, even more so than Facebook."

But that must not be bad, says Zwanenburg. "It does not matter where your mother is, because Facebook serves multiple platforms, they have diversified well."

The social media strategist Loth thinks that Instagram can also compensate for the loss of users on Facebook. "

Instagram can pump as a primary platform for young people nothing is wrong, but if they go on platforms of Alphabet, like YouTube, then you have a problem."

The Competition is too fast

You do not have to rocket science to see that this investment was very smart. The same applies to the purchase of Whatsapp in 2014. "By attacking the entire market, you prevent a competitor from taking it, even if you do not win much on Whatsapp, you prevent others from buying it and continuing to develop it. "

It compares with multi-platform media companies. "You do not have to depend on a publication."

Young people have the future

The biggest challenge for Facebook is to keep young people and young adults on one of the platforms, says Loth of SOCIAL.INC. And with Instagram in the possession, the company is really taking good steps in that direction.

"Stronger: I think YouTube has yet to adapt, because it's the biggest competitor The biggest advantage of Instagram is that the network Mainly focused on smartphones, where YouTube is really designed for the desktop, and Instagram works with a calendar, and anyone who does not watch TV scrolls quickly on Instagram. "

They will continue to do this for a while, Loth hopes. And Facebook benefits.

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