The Fiscal Cliff Won't Stop Facebook From Soaring!

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Now that the so-called fiscal cliff is almost a certainty, and fear among investors is growing by the minute, should we run for the exit or should we embrace the pain and see it as a buying opportunity?

About a month ago I wrote an article on Facebook (NASDAQ: FB) and listed the reasons why I thought the stock was poised to go higher. Now, after these few weeks I want to add to that article several new pieces of information and make an even stronger point about the stock soaring during 2013.

Facebook Gifts

It was introduced as a prototype or beta version right by the time when the latest earnings call was released. Now, we can see it in full mode all over the social site. I find it very useful and as a matter of fact I became a happy customer a couple of days ago. Though it is true that I haven’t seen any of my friends used it so far, I think it’s just a matter of time for it to happen. It truly helps to be able to give a little something to the ones you care even with just 5 bucks.

Facebook Pages

For those of us who own or manage a Facebook page with the intention to attract and retain a fan base, it has now become easier than ever to do so. With a more detailed and user friendly interface, now pretty much everyone can do it on their own. This, will help small (and I mean really small) businesses manage a modest budget on their own, thus, helping Facebook monetize that side of the business as well.

Google (NASDAQ: GOOG) is a direct competitor of Facebook with their Google+ service. Though their communities (which can be compared to Facebook pages) are still way behind when it comes to user base, we should be aware of the threat it represents. Having well-known services like; YouTube, Gmail, Blogger, AdSense, Maps, Reader and many more, can give Google an edge over Facebook at any time.


Here’s where the money will be printed for Facebook during the next coming quarters. We already know how important mobile is for every company, and Facebook is already working on it. I wrote about that on my previous article titled "Facebook Stock is Destined to Rise" and about the fact that even with the 3Q12 was the very first for Facebook mobile to generate revenue, it already accounted for 16% of the total income for the quarter.

During this time, we have seen many more adds on mobile than we saw before. The “promoted posts” let advertisers pay a little extra for the benefit of being featured at the top of the news feed of their followers and the followers’ friends. I don’t know about you, but I certainly have seen many promoted posts during the last couple of months even though I am not a person who “likes” too many pages.

Another mobile feature is the “Nearby” feature, which offers “New ways for people to discover your business” as stated on the Facebook for Business section. This is nothing more than competing directly with YELP (NYSE: YELP), but improved. Being able to rate places and businesses like on YELP but now adding the recommendations from your friends will result in a nice tool when trying to find a new business.

With all that said, do you really think the fiscal cliff will affect Facebook’s growth potential? I doubt so. If Facebook were an old company I may give it a little thought, but, since it’s barely taking off, all we will see is their numbers improving. So, that figure of $1.546 billion in revenue for the 4Q12 I expect, it’s now looking low given the potential ahead.


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adriano22 has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook, Google, and Starbucks and has the following options: long JAN 2014 $20.00 calls on Facebook and short JAN 2013 $47.00 puts on Starbucks. Motley Fool newsletter services recommend Facebook, Google, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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