Is Facebook a Good Stock to Buy and Own? | Ask A Fool - 3/19/14 | The Motley Fool

TL;DR

Facebook was presented as a good long-term stock to buy and own, provided the investment story did not substantially change. Jason Moser highlighted its billion-plus registered users, leadership under Mark Zuckerberg, and a mobile advertising market expected to grow from $18 billion in 2014 to $42 billion by 2017. Read on for his assessment of Facebook’s opportunities, risks, engagement strategy, and place among social media stocks.

Transcript

hey fools Brendon Matthews here joined by Jason Moser this is our ASCO fool segment where we answer your questions we've got a great one today the question is what do you think of Facebook stock is it a good company to buy and own Jason what do you think yeah good question and I think for a for a while I was a bit skeptical of Facebook for a number... Read More

Key Insights

• 💪 Facebook has a huge market opportunity in mobile advertising due to its large user base and strong network.
• 👤 The leadership of Mark Zuckerberg and the company's established user base make it a promising long-term investment.
• 👤 The next decade for Facebook will focus on user engagement and expanding its reach through acquisitions.
• ❓ Initiatives like internet.org further showcase the potential for growth in untapped markets for Facebook.
• ☄️ Acquisitions like Snapchat and WhatsApp may contribute to Facebook's growth in the coming years.
• 🐕‍🦺 Facebook follows the "Hacker Way," always striving to improve its products and services.
• 👯 Mark Zuckerberg's passionate involvement in internet.org highlights his dedication to connecting more people to the internet.

Questions & Answers

Q: Is Facebook a good stock to buy and own?

Jason Moser said Facebook was an investment he had become comfortable buying and holding for the next 20 years. His view depended on the investment story not changing substantially, and rested on Facebook’s market opportunity, established user base, leadership, and potential to increase engagement.

Q: Why did Jason Moser become more positive about Facebook stock?

Moser said he had initially been skeptical for several reasons but changed his view after researching and learning more about the company. He was persuaded particularly by Facebook’s market opportunity and powerful network of more than a billion registered users.

Q: What mobile advertising opportunity did Facebook have in 2014?

Mobile ad spending was expected to reach $18 billion in 2014 and $42 billion by 2017. With Facebook bringing in somewhere around $8 billion during the most recent 12 months, Moser saw tremendous room for growth from mobile advertising alone.

Q: What made Facebook’s network powerful?

Facebook had more than a billion registered users and was described as the clear leader by user-base size. Moser viewed that established network as evidence that the company was doing something right and as a foundation for future engagement.

Q: How did Facebook compare with LinkedIn and Twitter as an investment?

Moser did not choose a single favorite among Facebook, LinkedIn, and Twitter, which he called the big three social networking stocks. He suggested that owning a little of each could be worthwhile because of their leadership teams, market opportunities, and established user bases.

Q: What was Facebook’s priority for its second decade?

Facebook’s first 10 years focused on establishing its user base, according to Moser. He expected the next decade to emphasize engagement and finding ways to keep people on the platform.

Q: How could acquisitions support Facebook’s growth?

Moser cited Facebook’s effort to buy Snapchat and its purchase of WhatsApp as examples of its engagement strategy. He believed acquisitions like these could play out well for the company over the coming years.

Q: Why was internet.org considered a growth opportunity for Facebook?

Internet.org reflected Mark Zuckerberg’s focus on bringing internet access to places without connections. Because two-thirds of the world was described as still unconnected, Moser saw a large opportunity beyond the one-third already connected and expected Zuckerberg to pursue it over the next decade and beyond.

Summary & Key Takeaways

• Facebook has a significant market opportunity in mobile advertising, with expected spending of $18 billion in 2014 and $42 billion by 2017.

• The company has over a billion registered users and is considered a powerful network in the social media industry.

• The next decade for Facebook will be focused on engaging users and expanding its reach through acquisitions and initiatives like internet.org.