) new application 'Home' will be made available for
) Android based smartphones from Apr 12 in the U.S. Users can
download the latest app from Google's app store and have their
Facebook account as the phone's cover screen.
Moreover, regular Facebook features such as commenting on
updates and chatting with Facebook friends will be possible with
'Home'. Video features are expected to be added in the near
future. Additionally, Facebook has plans to launch 'Home' for
Android-run tablets as well. Facebook's 'Home' is compatible with
HTC Corp.'s One X and One X Plus and Samsung's Galaxy S III and
Galaxy Note 2.
The Home application might just be the catalyst that the
company needs to generate incremental mobile ad revenues. In the
last reported quarter, Facebook's 23% ad revenues came from
mobile. Facebook also stated that 680 million people accessed
Facebook using mobile devices in Dec 2012, which was up 57% from
the previous year period.
According to eMarketer, U.S. mobile ad spending is expected to
grow 77% in 2013 to $7.29 billion from $4.11 in 2012. Thus, we
expect Facebook's initiatives in the mobile space to
incrementally benefit the company going forward to attract new
We believe that Facebook has significant growth opportunities
in the online advertising format. Facebook's massive user base
and its ability to track personal details over time make it a
formidable force in the online ad market.
Facebook can use this massive database to help advertisers
target relevant ads going forward. Moreover, the company has
acquired the Atlas Advertiser Suite from
) to strengthen its position in the online ad market. The
company's expansion in the mobile segment is impressive.
However, a volatile macroeconomic environment and increased
investments to expand mobile offerings are expected to hurt
margins in the near term. Competition from Google and
) in the display ad market is another headwind going forward.
Currently, Facebook has a Zacks Rank #3 (Hold).
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