Fantastic Facebook
Facebook's gains over the past five years have been more impressive even than Amazon's, with the social media giant posting a return of almost 750% over that time frame. Much of that rise came after a disappointing debut for Facebook in the public stock market, with its shares plunging after its 2012 initial public offering amid worries about the service's viability as the tech industry shifted from its previous desktop focus toward mobile devices. Yet Facebook came up with growth strategies extremely well, with purchases of Instagram and WhatsApp having received criticism at the times they were made yet proving to be highly successful over the ensuing years. A well-executed transition toward a viable version of the service for mobile devices kept Facebook relevant even as mobile proliferated, and a focus on optimizing its ability to offer targeted digital advertising to its multi-billion member user base continues to pay off well for the company.
Recent challenges have made a dent in Facebook's share price recently, including the Cambridge Analytica scandal and the European Union's enactment of its General Data Protection Regulations to support user privacy. Some investors also fear that the advertising market might be approaching the saturation point, limiting Facebook's potential future growth, and that generational shifts might make Facebook less attractive to younger users. Yet by embracing Instagram, Facebook has shown that it can develop and promote other services to meet users' needs even if its namesake service ceases to have the appeal it initially had. That will be critical in driving future share-price gains.
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