If I were Apple (AAPL), Samsung, and Google (GOOG), I'd be worried. Facebook (FB) has been making some major moves over the past several months, and intensified those moves in the past several weeks. Facebook has been seeking out acquisitions, patents, and product expansion opportunities. With 901 million active monthly users, it will be very easy to create a cult-like following for any future products that they roll out into the marketplace.
Several months ago Facebook unveiled a new strategy that introduced ads to their mobile platform. Facebook has over 400 million active monthly mobile users. By finally introducing mobile ads to those customers, they have created another revenue stream with access to just under half of their traditional user base. This move assisted Facebook in moving their total revenue up to $1.06 billion in the first quarter of 2012. This move also helped begin the process of making mobile gaming company Zynga (ZNGA) have a lesser impact on their top line. Zynga made upwards of 13% of Facebook's total revenue last year. In the first quarter of this year, they comprised just 11%. That percentage is sure to drop as Facebook expands their revenue streams.
Facebook just acquired AOL's (AOL) patents from Microsoft (MSFT), as well as purchased Instagram. Both moves allow Facebook to add functionality and security for their customers. AOL's patents allow them a multitude of avenues to take down the road, depending on how they are applied. Instagram allows Facebook access to more users, and another revenue stream that the previous Instagram owners didn't fully understand how to exploit with proper ad placement.
Now, HTC has announced that they have partnered with Facebook on a "project." Fully expect this to be a phone that allows users to enjoy more Facebook experiences through a mobile platform. I expect a marriage between a smartphone, and a Facebook 2.0 experience. This could be the game changer that Facebook needs going forward. Current management understands that if they want to succeed in the future, they need to extend the business model outside of strictly social media. This partnership with HTC could be the breakout product they need.
If Facebook can continue to mature as a business, the sky really is the limit for them. There is still the potential for Facebook to target Bing from Microsoft, and possibly Research in Motion (RIMM) down the road. Be careful Apple and Google. Objects in the mirror are no longer closer than they appear, Facebook has arrived. Stay tuned, as Facebook doesn't seem to be slowing down with new products or acquisitions, even with the IPO date right around the corner.
Additional disclosure: As always, seek advice from your financial advisor before buying any stocks mentioned within this article. Equities have inherent risk, and you should never invest a dime that you can not afford to lose.
Disclosure: I am long AAPL.