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FB vs. ETF Alternatives
Wednesday, Dec 112013, 5:24 PM
Wednesday, Dec 112013, 5:24 PM| 7 Comments
- Better a week late than never. Facebook (FB) will be joining the S&P 500 following the Dec. 20 close, and will also be added to the S&P 100. The social networking giant is replacing test equipment vendor Teradyne (TER).
- Alliance Data Systems (ADS) and Mohawk Industries (MHK) are also joining the S&P 500 following the Dec. 20 close. They're replacing Abercrombie & Fitch (ANF) and JDS Uniphase (JDSU).
- FB +3.9% AH. MHK +2.4%. ANF -0.8%. JDSU -0.6%.
Wednesday, Dec 112013, 12:38 AM
Wednesday, Dec 112013, 12:38 AM| 5 Comments
- "The gap between ... two Facebooks (FB) — the one its managers want to see, and the one its users like using today — is starting to become visible," writes AllThingsD's Mike Isaac in a report examining the social networking giant's efforts to evolve into a news/information hub.
- But while Mark Zuckerberg wants his company to be "the best personalized newspaper in the world," its users still largely see it as a place to keep in touch with friends/family and "share a funny, viral story or LOLcat picture." Viral, "low-quality" content often receives far more clicks than "high-quality" news pieces.
- This disconnect has reportedly led Facebook to hold off on rolling out its media-heavy news feed overhaul (announced in March) to most users, and for engagement to stall among those users who have received the update.
- An update amounting to "a less drastic change" is now reportedly being prepped. Ahead of that move, and in spite of the click rate data, Facebook has updated its news feed algorithm to show more "high-quality" stories.
- Meanwhile, Twitter (TWTR), while still having a far smaller active user base, has evolved into a news hub for many of its users, and is trying to make the most of this status.
- Isaac's report arguably drives home the challenges Facebook contends with as it tries to keep users (inc. younger ones) tiring of its traditional fare engaged, and without alienating the hundreds of millions of users content with the status quo.
Tuesday, Dec 102013, 7:08 PM
Tuesday, Dec 102013, 7:08 PM| 1 Comment
- Twitter's (TWTR) iOS and Android apps have been updated to place much greater emphasis on the service's direct messaging (DM) feature - a DM tab has been added to the apps' main navigation bar - and to enable photo-sharing via DMs.
- The update is aimed squarely at contending with the popularity of mobile messaging apps such as WhatsApp, Kik, Line, and Viber. Though centered around basic messaging services, the apps have added support for photo/video-sharing, 3rd-party games, and even payments, and in doing so represent a challenge to Facebook (FB) and Twitter's engagement rates.
- WhatsApp alone had 350M+ monthly active users (MAUs) as of October, and Line has 300M+ registered users. Twitter had 231.7M MAUs at the end of Q3.
- Instagram is reportedly thinking of adding a private photo-sharing/messaging feature of its own. Twitter recently began allowing image previews to appear in timelines.
Tuesday, Dec 102013, 1:34 PM
Tuesday, Dec 102013, 1:34 PM| 2 Comments
- Though still generally below their mid-October highs, Internet momentum stocks are turning in what might be their best performance during a rally that has now lasted two weeks. While Twitter (previous) is the star of the show, Facebook (FB +3.5%), Yelp (YELP +1.8%), Groupon (GRPN +4.7%), Netflix (NFLX +2.1%), LinkedIn (LNKD +1.4%), and Pandora (P +3.4%) aren't getting left out.
- Several Chinese Internet names are also higher. In addition to Baidu, which is benefiting from a bullish Pac Crest note, Sina (SINA +6%), Ctrip (CTRP +6.1%), Qunar (QUNR +6.3%), and Youku (YOKU +3.9%) are staring at big gains.
- Morgan Stanley's Scott Devitt is out with another bullish note on Groupon. Devitt notes an MS survey of 358 SMBs found only 26% of merchants have run Groupon deals in the last 12 months, something he thinks suggests there's "a long run way of merchants" that can still be signed up.
- He also sees room for Groupon to improve its customer targeting - the company still isn't able to track which deals were shown to customers, or were clicked on, in prior e-mails - and expects its new site (allows deals to be browsed without an e-mail address being given) and a revamped e-mail layout to boost growth.
Monday, Dec 92013, 4:56 AM
Monday, Dec 92013, 4:56 AM| 11 Comments
- Google (GOOG) and Microsoft (MSFT) are among eight technology giants that have started a campaign to limit government online surveillance. The other companies are Apple (AAPL), Yahoo (YHOO), Facebook (FB), Twitter (TWTR), AOL (AOL) and LinkedIn (LNKD).
- The move appears to represent an attempt by the companies to prevent a loss of business because of Edward Snowden's revelations about the scope of the National Security Agency's spying campaign. Forrester estimates that the disclosures could cost the U.S. cloud computing industry $180B by 2016.
- While the firms want limits on governmental authority to collect user information, as well as increased oversight, given the tech industry's own data practices, some might say that there's more than a whiff of the pots calling the kettles black.
Thursday, Dec 52013, 5:27 PM
Thursday, Dec 52013, 5:27 PM| Comment!
- Instagram (FB) has sent out invites for a Dec. 12 NYC event. The fact many of the invites featured a wooden box with an Instagram photo printed on it has fueled speculation the event will feature the launch of a printing service.
- Some think Instagram, which just began monetizing its service via ads, could make hundreds of millions annually simply by adding a print button to its apps, and taking a cut on orders placed through it.
- AdAge reports Facebook is not-so-subtly telling marketers they won't be able to reach users as effectively going forward via posts published on brand pages (and then distributed for free onto the news feeds of users who "liked" the page), as the company attempts to "make sure people have a meaningful experience on the site."
- While advertisers might view Facebook's efforts as an attempt to sell more ads, they do come amid worries certain users (particularly younger ones) are cutting their Facebook usage as a result of finding their news feeds filled with uninteresting material. AdAge's report comes shortly after Facebook tweaked its news feed algorithm to display more "relevant" news stories.
- During a Credit Suisse conference talk (transcript), infrastructure chief Jason Taylor shined a light on the huge investments that go into optimizing the performance, cost structure, and power efficiency of Facebook's data centers. Among other things, Taylor asserted Facebook only needs one technician for every 20K servers it owns, compared with a 1:450 ratio at other data centers.
Wednesday, Dec 42013, 5:30 PM
Wednesday, Dec 42013, 5:30 PM| 5 Comments
- General Growth Properties (GGP) is replacing Molex (set to be acquired by Koch Industries) in the S&P 500 following the Dec. 9 close. GGP is up 5.4% AH on the news.
- Facebook (FB), rumored to be the next company to be added to be added to the index, is selling off on the news after rising 4% in regular trading.
Wednesday, Dec 42013, 2:32 PM
Wednesday, Dec 42013, 2:32 PM| 4 Comments
- UBS thinks Facebook (FB +3.6%) could be added to the S&P 500 as soon as tonight. Deutsche also believes such a move could happen soon.
- With a market cap of $118B and a 2013 revenue consensus of $7.6B, Facebook's inclusion within the benchmark index appears to be just a matter of time.
- Meanwhile, Instagram exec Emily White, who was in charge of the mobile photo-sharing service's nascent ad efforts, is leaving to become the COO of Snapchat. She could return to the fold one day if Snapchat founder Evan Spiegel has a change-of-heart regarding Facebook's (widely reported) buyout overtures.
Monday, Dec 22013, 12:53 PM
Monday, Dec 22013, 12:53 PM| 3 Comments
- The Business Standard reports Facebook (FB -0.6%) is in talks to buy Little Eye Labs, an Indian startup that has developed tools to monitor/analyze Android app performance, and troubleshoot problems. Sources state a deal is expected to be announced over the next few weeks.
- If it happens, the acquisition would strengthen Facebook's efforts to evolve into a de facto platform for developing mobile and Web consumer apps, social-themed or otherwise.
- Those efforts received a major boost earlier this year through the acquisition of popular mobile/Web app development tool platform Parse. They were later strengthened by Facebook's purchase of Onavo, whose mobile utility apps generate mountains of valuable data for third-party developers about how their apps are used.
Friday, Nov 222013, 4:38 PM
Friday, Nov 222013, 4:38 PM| 2 Comments
- "Well-placed sources" tell Om Malik Instagram (FB -1%) is getting ready to launch "private messaging features" for its photo/video-sharing apps. Instagram is also said to be "experimenting with the idea of group messaging." The features are likely to be included in an app update expected by year's end.
- Private and group photo messaging services would represent a challenge to fast-growing Snapchat, widely reported to have snubbed Facebook's M&A overtures. And Instagram, with 150M+ mobile MAUs, high engagement levels, and a solid cachet with younger social media users, is arguably a better platform for launching the features than Facebook proper.
- But as the many mobile photo apps that have failed to slow down Instagram (in spite of adding filter support) can attest, it takes more than adding comparable features to steal a popular social networking/messaging platform's thunder. Last year, Facebook launched a Snapchat-like app called Poke, but it failed to gain much traction.
- Previous: Sandberg defends Facebook's teen usage levels
Friday, Nov 222013, 1:04 PM
Friday, Nov 222013, 1:04 PM| 15 Comments
- Sheryl Sandberg (FB -0.5%) during an AllThingsD interview: "Overall U.S. teen usage of Facebook remains stable ... The vast majority of U.S. teens are on Facebook. And the majority of U.S. teens use Facebook almost every day."
- The comments are meant to calm growing worries Facebook's popularity is waning among younger U.S. users, and that this trend could have broader long-term implications for Facebook usage. Those fears have been amplified by Facebook's admission it saw a Q/Q drop in U.S. teen DAUs in Q3, and reports it made a rejected $3B+ bid for Snapchat.
- Sandberg insists Facebook's news feed ad business can keep growing thanks to improved ad quality and targeting - new tools such as Custom Audiences and Lookalike Audiences are expected to help - even as Facebook refrains from any further major increases in news feed ad load.
- She also says Facebook is "seeing significant increased [ad] spend among e-commerce companies," and asserts Facebook's popular app install ad product (responsible for 145M downloads as of six weeks ago) is "one of the only ways that people can get their apps discovered."
Thursday, Nov 212013, 10:17 AM
Thursday, Nov 212013, 10:17 AM| Comment!
- As part of an Internet sector coverage launch, FBR's William Bird has assigned Outperform ratings to Facebook (FB +1.4%) and Monster (MWW +2%), while respectively giving the companies PTs of $60 and $7.
- Taking a big-picture view of things, Bird calls Facebook "an investment in a large-scale data-rich platform run by a group of highly innovative people who are likely to continually develop more ideas for improving engagement and monetizing it."
- Bird adds that while "no one really knows how big Facebook can be," he thinks it has "significant greenfield opportunity in front of it," and that its ad pricing is "inflecting."
- Monster, meanwhile, is called a play on job recovery, strategic initiatives, and buybacks. Bird argues Monster's low valuation (caused in large part by share losses to LinkedIn) minimize risk, and notes buybacks have already lowered the jobs site's share count by 11% this year. He thinks a 60% share count reduction is possible over the next three years.
- Monster flew higher earlier this month after providing mixed Q3 results and above-consensus Q4 EPS guidance, and announcing the sale of a 49.9% stake in Korean site JobKorea.
Monday, Nov 182013, 12:33 PM
Monday, Nov 182013, 12:33 PM| 14 Comments
- Facebook (FB -3.7%) is headlining a selloff in several fast-growing U.S. Internet names; Twitter, which saw Wunderlich start coverage at Sell this morning, is also a notable decliner.
- The NYT has published a column discussing Facebook fatigue among younger users, and discussing the possibility of a future where "where Facebook is no longer the default place on the web where people go to network."
- Among other things, the paper highlights Facebook's recent U.S. teen DAU decline, recent survey data, and the rise of Snapchat, which reportedly turned down a $3B+ buyout offer from Facebook.
- It also reports some developers have said Facebook made an "unusually aggressive" pitch for their support at a recent event, and were less inclined to to partner with the company as a result. Facebook, aided by its acquisition of popular mobile/Web app development platform Parse, wants to become a de facto platform for consumer Web app development.
- The WSJ's Farhad Manjoo argues Facebook doesn't need to be worried about Snapchat's popularity with teens. "Kids are often wrong. There is little evidence to support the idea that the youth have any closer insight on the future than the rest of us do."
- Paul Kedrosky: "Don’t track teen tech usage because they’re brilliant tech futurists. Do it because they, unlike adults, over-sample new services."
- Previous: Facebook, Twitter, Instagram, and boredom
Wednesday, Nov 132013, 2:05 PM
Wednesday, Nov 132013, 2:05 PM| 31 Comments
- The WSJ reports Facebook (FB +3.1%) offered at least $3B for Snapchat in "recent weeks," but was turned down. The paper had previously reported of a $1B+ offer.
- Snapchat co-founder/CEO Evan Spiegel is said to be unlikely to consider an acquisition at least until early next year, by which time he hopes further growth will allow for a higher valuation. Snapchat currently doesn't have any revenue.
- Chinese messaging/gaming giant Tencent has reportedly offered to lead an investment round in Snapchat that would give the privacy-friendly photo-sharing platform a valuation of $4B (previous).
- The latest report comes a couple weeks after Facebook disclosed it saw a Q/Q drop in U.S. teen DAUs, and amid general concerns Facebook engagement is declining among younger users who view it as more boring than other social media platforms that are more public-facing and/or support a greater degree of anonymity.
- On the other hand, Instagram's popularity among younger U.S. users continues to grow.
Monday, Nov 112013, 9:18 AM
Monday, Nov 112013, 9:18 AM| Comment!
- With many Internet names having seen giant 2013 gains that have led P/E and P/S ratios to rise to eye-opening levels, Morgan Stanley is cutting its view of the sector to In-Line from Attractive, even though it thinks industry trends remain healthy.
- Google (GOOG) has been pulled from MS' Best Ideas list. The Web giant's shares are up 44% YTD, but their multiples remain subdued compared with those of some peers: Google currently trades at 16x 2014E EPS after backing out net cash/investments. Shares -0.5% premarket.
- Facebook (FB) -1.3%. Top VC firm Andreessen Horowitz has disclosed the sale of roughly 1/3 of its Facebook stake (2.28M shares).
- The sector has already corrected a bit; shares sold off hard on Thursday as Twitter made its much-hyped debut.
Thursday, Nov 72013, 11:48 AM
Thursday, Nov 72013, 11:48 AM| 16 Comments
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
- View all 1 replies
jim139220:: I sold 1/3 of my FB stock
- View all 2 replies
LTI0723:: Good article. Well worth the read. Thanks.
Corey Sommers:: My pleasure, thanks so much for the compliment!