Published by Matthew Gustin
10 months ago
Facebook continues to grow rapidly, thirteen years after the founding. After conquering the mobile advertising market, the company’s founder, Mark Zuckerberg, is now setting the stage for video.
The social network, which was founded in 2004, continues to grow at a pace, as usually only startups can. Facebook announced a 54% increase in sales of $27.64 billion and an increase of 177% to $10.22 billion in profits in 2016. Facebook has been able to bring around 270 million new users into their social network, where 1.86 billion people are now frolicking. And the company knows how to market them on the ads market. In the fourth quarter, for example, Facebook was able to increase the advertising revenue per user by a third (to $4.83).
As a result, Facebook grew faster than the digital advertising market and was thus able to expand its second place after Google. The social network has long since become a paradise for advertisers because of its purposeful advertising. According to estimates by eMarketer, Facebook has – after Google with 41% – this year a market share of 18% on the American digital market, which has a total value of $82 billion. The two companies are the only major players on this market. Their competitors remain at a few percentage points. Microsoft comes to 4, Yahoo to 3 and Twitter to 2%.
The digital advertising market is expected to reach approximately 40% of the entire American advertising market this year, and thus clearly shake-off the advertising medium television as traditional number 1 with a market share of currently 35%. The decline of television as an advertising medium could accelerate further in the coming years. Not only does streaming services such as Netflix or YouTube, which belongs to the large-group alphabet, make the TV stations very competitive, also Mark Zuckerberg stated his ambitions at the telephone conference on Wednesday.
In the future, if you think about video content, Facebook should be the first thing coming into your mind, at least that’s what Zuckerberg wants. “I see video as a megatrend, comparable to mobile phones,” said the CEO. Already some time ago, Facebook had explained that the company is going to buy quality video content. According to the Wall Street Journal, Facebook is working on a video app that could be accessed via Apple TV and other TV boxes.
To the extent, however, as Facebook now distributes such content over its social network, the essence of the company will also change. So far, Facebook had refused to understand itself as a media company and thus take full responsibility for the majority of user-generated content. The role of Facebook in fake news, which were spread over the network during the election campaign, however, has provoked criticism of this neutral attitude.
Investors do not seem to mind this. They continue to cheer Zuckerberg and send the share price of the company valued at $384 billion, in the stock market, by 3% upwards in after-market trading. Mark Zuckerberg’s Facebook equity rose by $3 billion to $59 billion; however the entrepreneur has almost completely donated his shares to a foundation.