• Facebook needs big growth in the east to sustain its growth path. Its “Internet.org” project currently being rolled out in India will be interesting to see how the rollout pans-out.
  • Plans are afoot in Europe to change privacy rules which would make life much more difficult for Facebook. Belgium has already launched a lawsuit.
  • The US is due a recession. E-commerce barely grew in the financial crisis from 2007-2009. I can’t see Facebook gaining much more traction when advertisers budgets get cut.
  • Facebook stock could fall

     

    Facebook (NASDAQ:FB) recovered well last week after dropping to $82 a share. Bullish investors have become even more bullish with the recent announcement by Mark Zuckerberg where he stated that on the 23rd of August, Facebook had 1 billion users on its platform which was a milestone. This company continues to grow users and revenues even though both metrics are slowing. Essentially users have become the “products” of this company. Facebook’s whole identity is to grow its user-base on a global scale even if it needs to lift drones to an altitude of 90,000 feet in order for new users to have access. It just shows how valuable each and every user is to this company.

    Also see: Facebook Stock Analysis Video evaluating Facebook fundamentals.

    Once Facebook gets you hooked up, It is all about gathering information (which it is an expert at) so advertising can be targeted more effectively. Where Facebook has really gained traction recently is its Facebook Connect platform where users can post comments on third party sites but still through the Facebook platform. This is a win-win for the third party site and Facebook because Facebook gets more information about their user and the third party site has a bigger opportunity in making a sale because the user is engaged. Nevertheless the average time spent by a user currently on the Facebook platform is 46 minutes which appears short in the grand scheme of things. Personally, I see things getting a bit tougher for this company. Let’s go through a few reasons why.

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