Facebook is often mis-characterized as a pure “social network” and its broader aspirations are not recognized by investors, says RBC Capital Markets analyst Jordan Rohan. But with estimates putting active users at roughly 42 million, growth of 3% per week and hundreds of thousands of applications in development, both Google Inc. (GOOG) and Microsoft Inc. (MSFT) see its potential.
A Wall Street Journal report Tuesday said Microsoft is in talks to buy a minority stake in the popular Web site. Google also is rumored to be interested.
In a note to clients, Mr. Rohan outlined the more “complex mission” Facebook is pushing. It is a technology company, not a media company – much like Google, he said. Facebook is also trying to enable more efficient sharing of information. And if it executes properly, it could be worth billions or more in the next five years, Mr. Rohan added.
“We believe it took a few years for people to realize that Google has very broad ambitions to organize the world’s information – all of it, not just the stuff that was already present on the Internet today,” he wrote.
While Google funds, tags, ranks and presents information, Facebook takes that data and other more personal info, and helps people share it.
“We believe where one leaves off, the other begins,” the analyst said.
In terms of monetization – the real reason these Internet giants are after Facebook – Mr. Rohan says “real value is created when Facebook can match advertiser and consumer intent.”
