Facebook The Media Company If It Looks Like A Duck

20,000 Foot View: Facebook beat financial analyst estimates with its            2016 earnings but announced that ad revenues would likely slow in 2017, due to the digital ad market feeling the pinch of advertiser budgets, which are lagging behind the shift in user behaviour. Facebook’s stock fell by            but Plan B is already in motion: to become a media company. Facebook delayed this move as long as it possibly could, showing little enthusiasm for getting bogged down with content licences while it was able to drive audience growth and engagement by piggybacking on other people’s content. That strategy has run its course. Facebook is now about to start looking and behaving much more like a media company, but in doing so it will rewrite the rulebook on what a media company is.

Key Findings

• Facebook’s combined            of Messenger, WhatsApp and Instagram            it a            share of the            messaging app marketplace
• Facebook’s messaging            strategy is shifting audience time            platforms that Facebook is currently            able to monetize
• At the            of            2014, Facebook Messenger MAUs            just            of all Facebook users,            by the end of            2016            share had risen to            –            saturation
• Facebook has            strategic imperatives:            get users more            on its core platform, and            new revenue streams for them           
           of consumers watch videos on Facebook, representing            of Facebook’s weekly active users
• Facebook has            a one trick pony –            Facebook’s 2015 revenues were from           
• To offset            ad revenue, Facebook needs to            a suite of new revenue            the sum of which will            transforming itself into a media           
• The            billion            and PC gaming industries are            standout addressable segments for Facebook
• Filters, live            TV, video and music are            other areas in which Facebook            explore monetization
• Convincing Wall            that its long-term strategy justifies            near-term struggle is almost as            for Facebook as executing the            itself

Companies and services mentioned in this report: Alphabet, Amazon, Apple, Facebook, Instagram, Messenger, Musical.ly, Pandora, Spotify, WhatsApp, YouTube.