This note is about the difficulties of forecasting. The investment analysts are generally very optimistic about the future. When coupled with a focus on individual companies, they can end up forecasting that all companies will increase their market share. I will illustrate with the online advertising industry. The chart below highlights nine important companies in the industry. Google is the leader with more than 50% of the market. Facebook, Baidu and Twitter are the promising up-and-coming companies. Microsoft, AOL, and Yahoo are yesterday's companies.
Musings on business strategy from a business school professor in Singapore. Content will include a sporadic commentary on business related news, recent examples of old principles and frameworks, book reviews, and more general thoughts related to strategic management broadly conceived.
Showing posts with label FB. Show all posts
Showing posts with label FB. Show all posts
Friday, 28 February 2014
Wednesday, 26 February 2014
Facebook's acquisition of Whatsapp
This note looks at Facebook's acquisition of Whatsapp. Before writing the note, I was inclined to believe Damodaran's conclusion that the acquisition price was astronomical. However, after running some models I have concluded that the acquisition is okay given Facebook's high current valuation. The key issue for Facebook is to justify its current valuation, not justifying the acquisition of Whatsapp.
Saturday, 13 April 2013
Will Facebook Home increase Facebook's revenue?
Facebook has just introduced the Facebook Home application for a selected set of Android smartphones from Samsung and HTC. Is this a good idea?
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