Tech Giants Report: Facebook 1Q2020

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Amazon, Facebook, and Alphabet and Apple all report in these weeks with massively interesting insights for how they are responding to the crisis. Each tech giant moves with different strategies as they scoop up rivals, talent, and make big moves. First up: Facebook !

Facebook 1 Quarter 2020 Key takeaways:

Facebook Results. Tech Giant Earnings for Very Busy People.

No matter what I might think, the pandemic has brought me back to Facebook. I am not alone.

So how has this pandemic treated the advertising business model? It appears that the company’s specific form of advertising has fared well: an ad action model that results in more efficiency for the play-and-repeat marketing strategy of games and DTC brands.If I know $1 in gets me $3 margin, brand owners will keep feeding the machine if they get more from their return on ad spend.  

Meanwhile – long term investors are becoming of Facebook’s monoculture business models. What’s next they ask. Indeed, Facebook has struggled to diversify its revenue base. And they are , On the downside, costs are going up more than investors expected as Facebook attempts to reign in the bad actors. Their alternative business models of hardware and payments have never flourished. Advertising is the dominant species business model. 

The company has fewer options than most big companies. They are threatened with anti-trust from regulators, which cools down acquisitions. But they made a massive investment in Reliance Jio, $5.7 Billion for a 9.99% stake. This may be as Yahoo! was to Alibaba, and investment in a company with much more potential to grow and diversify revenue streams. Maybe the future of Facebook is India. 

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