Investing in Facebook, Inc. Analytical Essay

Investing in Facebook, Inc.
An evaluation of Facebook, Inc. as a potential investment.
# 153714 | 914 words | 5 sources | MLA | 2013 | US
Published on Oct 28, 2013 in Business (Companies) , Business (Finance, Investment and Banking)

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This paper provides an analysis of Facebook, Inc. and the industry in which Facebook operates to evaluate a potential investment in the company. The paper finds that Facebook is a large-scale company with the possibility of continued growth, and the Internet industry has been continuously growing. The paper shows how the sources of revenue, scope of operations and the size of the company combine to reveal a solid background for Facebook.

From the Paper:

"The basic background of Facebook, Inc. may be revealed through the sources of revenue, scope of operations, and the size of the company. Facebook Inc has multiple sources of revenue or customers. The site attains most of its revenue through ads on the webpage. Approximately 85% of the revenue generated in 2011 came from advertising. The remaining 15% was attained through payments and various fees. (Raice) Zynga provides the majority of the Facebook Inc. payments business. The game provides several games for the site and assists in diversifying Facebook's revenue. An estimated 12% of Facebook's revenue was generated from Zynga in 2011. (Raice) Netflix served as another big customer for Facebook. According to Facebook's IPO filing, Netflix purchased 3.8 million dollars worth of advertising on the Facebook site. This accounts for only 0.1% of Facebook's total revenue. The purchases by The Washington Post accounted for another 0.1% with 4.2 million in ads. (Raice) The size of the company is revealed through the 2011 audited financial statements as well. Facebook, Inc. maintains 5.6 billion dollars in assets according to the report. (Womack) Facebook, Inc. also revealed the scope of operations in the 2011 audited financial statement. The report revealed international operations. (Womack)"

Sample of Sources Used:

  • CLAFFY, KC, and David CLARK. "Workshop on Internet Economics (WIE2012) Report." Computer communication review 43.3 (2013): 95-100.
  • Curran, James, Natalie Fenton, and Des Freedman. Misunderstanding the internet. Routledge, 2012.
  • Raice, S. H. A. Y. N. D. I. "Facebook sets historic IPO." Wall Street Journal(2012).
  • Russell, Andrew L. "Histories of Networking vs. the History of the Internet."SIGCIS Workshop, octobre. 2012.
  • Womack, Brian. "Facebook revenue will reach $4.27 billion, EMarketer Says." (2012).

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