Fb ecoystem 051112

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Transcript of Fb ecoystem 051112

DeMatteo Monness Event – Facebook’s Q1Lou Kerner Presentation, May 11 2012

Emergence of The Social Internet

Facebook’s Slowing Revenue Growth

Mobile MAUs Outpacing DAU Growth

Facebook S-1 Statement

“ We had 488 million MAUs who used Facebook through mobile products in March 2012… We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012 we begun to include sponsored stories… we do not generate any meaningful revenue from the use of Facebook mobile products….”

EdgeRank Is Facebook’s PageRank

Driving Engagement/Value on FB

Reach Generator Will Be Big

Mobile Means Mobile Apps

Facebook Lags In App Adoption

Source: comScore, May 2012

Is Facebook’s HTML5 Mobile Strategy Flawed?

“… web and HTML5 centric applications are simply not ready for prime-time…your nearly 1B person user base deserves better… incredibly slow loading and latency ridden mobile experience”

- Alan Knitowski, CEO of Phunware

The Zuckerberg Factor

• Zuckerberg is a visionary– He is on a quest for ubiquity– He is willing to forego short term revenue for

enhanced user engagement ...even if that user engagement is not immediately monetizable

– Any questions regarding his ability to lead the company are beyond absurd. Reminiscent of people who thought that Jobs wasn’t the right person to run Apple.

Introducing The FB APP Center

Forecasting Facebook

• What we know/believe– Slowdown in first quarter revenue growth due

(at least) in part to mobile– The history of media is that ad revenue

migrates to where people migrate, and they overspend to achieve scale

• What we can’t model – Facebook has basically an unlimited

opportunity to create new revenue streams from AppCenter, to Search, to Offers, to Ad Network, to PayPal…..

Facebook Forecast

Facebook Valuation

Facebook Risks

• Monetization of mobile• Platform risk – the majority of Facebook

log ins on Android devices by 2015• Government intervention around the world

due to privacy and/or monopoly concerns• Need for additional, larger acquisitions• Nothing is constant but change –

Disruptive mobile technology

Where Will Facebook Trade?• Facebook will be offered at the high end

of, or above, the $28-$35 range• While the press is reporting on Wall

street’s ebbing interest, Facebook is emerging as a bellwether for growth that must be owned

• The world’s never seen a stock with as much global retail interest.

• The shares will trade well north of its offering price

Lou Kerner

@loukerner

lou@socialinternetfund.comDisclosure: Lou Kerner owns shares of Facebook