The debate rages about whether facebook is hype or the big winning stock of this decade. Whether it is a whole new form of communication that is changing the world or just a fad. The debate rages whether its earnings and revenue growth can appease Wall Street or if they have even begun to monetize their traffic flow. Here are the ten reasons I believe it is highly probable that Facebook will turn into a monster stock.
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I believe Facebook is more than just a web site or a social networking tool it is a new form of communication in the same line as the telegraph, radio, telephone, television, etc. We know how well those mediums were monetized.
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Facebook is the winner of the social media website wars. MySpace and Friendster lost, Facebook is not a first mover into this space they are the winner.
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Facebook’s advertising model is much like Google’s Adsense with linking advertisement to people’s interests, only facebook has far more information on specific customers than Google could ever dream of.
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I do not think the fear should be on Facebook worrying about someone beating them by innovating, I instead believe that others should worry about face book integrating and beating its competition. Google failed miserably with Google+ but Facebook could succeed with an integrated search engine in their site.
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People think Twitter is Facebook’s competition but I believe they are two different genre’s one is about people that know each other connecting the other is about the sharing of raw information.
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Mark Zuckerberg has been on a near perfect winning streak since 2004 why bet against him? The odds are not in our favor.
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If Zuckerberg can start from scratch and create one of the most visited websites in the world in his dorm room on a shoestring budget what can he do with one of the top web sites in the world and billions in cash?
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Zuckerberg is very pragmatic and has played one game up to this point, now that he is running a public company he will play the new game of earnings expectations.
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This is not a bubble stock, this company creates billions in earnings, its stock price will be set based on its potential for growth.
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Facebook has created an impregnable hedge with its 900 million users, it is no easy feat to try to get 900 million people to move to a new site. We know this becasue Google all ready tried with all its brand power, technology, and money behind it and failed miserably.
(But of course I will only be risking 1% of my working capital while trading facebook and I will trade the chart and trend not my opinions and I will cut my losses if I am proven wrong.)