Tomahawk, WI 01/06/2014 (BasicsMedia) – It is a fact that millions of investors around the world and in America in particular have stayed on the sidelines since the scare of 2008 financial meltdown. Perhaps for lack of better understanding of the opportunities in social networking companies such as Facebook Inc (NASDAQ:FB), those who have stayed out of the market since 2008 have missed out on big gains.

It is thus important to lift the lid on social networking stocks for potential investors to understand how they can invest in these stocks without putting their financial future in jeopardy. Facebook Inc (NASDAQ:FB) is the best feet when it comes to assessing the social network stocks. It is obvious that social network companies operating and dynamic and sometimes risky environment. Nonetheless, Facebook Inc (NASDAQ:FB) is a good template to follow for investors seeking a pie of the social network benefits.

Facebook Inc (NASDAQ:FB) is by far the largest social network. The company boasts more than 1.2 billion active users monthly and this is the source of its strength. The company can only continue growing in strength because it is increasingly becoming compelling to remain in the network where most people are. The more people join the network, the more they contribute to its revenue.

Advertisers put their money where there are many eyeballs to see what they have to offer and Facebook Inc (NASDAQ:FB) has the biggest number of eyeballs that any advertiser can need.

The company is also diversifying its numbers as more and more users are now accessing the service on mobile devices. This is good for the future of the stock given that advertisers are putting a lot of premium on mobile ads because of their efficacy. Last year mobile advertising contributed about 49 percent of the company’s total ad revenue. This suggest that Facebook Inc (NASDAQ:FB) has long-terms hopes with its fast growing mobile access.

With a market cap of about $134 billion and a price-sales ratio of around 20, Facebook Inc (NASDAQ:FB) is fairly valued and more so, for growth. The stock thus offers a good opportunity for long-term investment.


Like any other stock, Facebook Inc (NASDAQ:FB) has its fair share of challenges. The company’s biggest challenge so far is the exit of teens from the network. Teens are a strategic demography for advertisers and their exit from the network may cause some shocks in the stock.

However, the good thing is that the company’s management has realized this problem and something is being done. The company is raising the status of its private and teen-friendly social network Instagram. This way, while young people could be leaving Facebook technically, they end up feeding the company’s revenue when they land on Instagram.

Bottom line

Facebook Inc (NASDAQ:FB) is a good social network stock to take up right now. The company has the numbers for long-term growth. The company’s expanding mobile presence and launch of features such as video ad are expected to boost its revenue going forward.

Although mobile messeging apps such as WhatsApp and Snapchat are reaping users from Facebook Inc (NASDAQ:FB), their impact will be minimal if Instagram continues with its current growth. Compared against main rival Twitter Inc (NASDAQ:TWTR), Facebook Inc (NASDAQ:FB)’s comes a cross a network that has withered the storm and better prepared to meet similar challenges. This is unlike Twitter Inc (NASDAQ:TWTR) which is considerably young and untested when it comes to dealing with market challenges.

Nonetheless, social networking stocks generally carry the promise that investors can bet on.

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