Facebook (FB) has been around since 2004, and has been a publicly traded corporation since May 2012. The stock price has been volatile since then, peaking around ~$40 directly after the IPO and crashing down to ~$18 several months after. The stock is currently holding steady at ~$28.5. As the corporation has continued to grow, it has altered its monetization methods and expanded its repertoire with offerings such as the Facebook Gift Card. When it comes down to it, however, Facebook is still all about gathering your data and selling you ads based on it. It is in this that the company has, and will, make most of its money. Recently Facebook announced several modifications to its user interface designed to make it a more profitable company.
Facebook claims that its new design will be like a "personalized newspaper." It is overhauling the design by segregating different elements of your life into different feeds. These various feeds will include music, visual content (photos and videos), as well as updates for your close friends.
The music feed will be directly connected to Spotify, the wildly popular music-streaming service that is beginning to take market share from Pandora (P) and other streaming music providers. Spotify is an aggressive data-mining program. It activates on startup by default and uses your Facebook account. It's one of those programs where when you click the "X" button to close it, it simply minimizes. Spotify remains on people's computers and gathers enormous amounts of data on their music preferences, and most likely other things as well. The fact that it is connected to Facebook creates a mother lode of data. With the new music part of the news stream, people will be connected like never before by the music that they listen to. Marketers will have direct access to the data provided by Facebook in order to target their ads effectively. This won't come cheap, but it will be highly effective. Since Spotify knows exactly what music you like, and Facebook knows just about everything else, this will become a powerful tool for music exposure, with Facebook raking in profits as a result.
The visual content feed is vital to Facebook. According to Zuckerberg, 50% of the content on Facebook is comprised of photos and videos. In reality, Facebook would have never gotten off the ground if it weren't for photos. People want to look at each other's profiles, check out girls, or see how their friends have aged over time. Facebook knows all this, and will be increasing the size of photos in the news feed, as well as making them more prominent in whatever fashion they can think of. Facebook has done this several times before, and they will do it again. This time around, however, ads will also be getting bigger. Zuckerberg states that ads will not be differentiable between regular content; they will be seamlessly integrated. This means that companies will be able to fly under consumer's "ad radar" and put relevant, targeted advertisements right where they want them: in your news feed.
Since the new news feed has just been announced, not much more data is available. On news of the change, the stock has moved 4%, displaying strong investor sentiment. With this latest announcement, Facebook is starting to become the corporation you always wanted it to be: a sleek, advertisement-driven, revenue-focused social media website. The time for fun and games is over. Facebook is going to sell ads by the millions, and its income statement will react accordingly. Its model is aggressive and yet subtle, and it will permeate the gargantuan Facebook user base with advertisements like never before. Going long is a safe bet.