) CEO Mark Zuckerberg recently announced that his company will
collaborate with other leading technology companies for a
campaign to expose more people to the world of Internet,
especially the ones who cannot afford it.
The project christened internet.org is targeted at providing
affordable technology to more than four billion people who are
unable to access Internet due to high cost of usage. The group is
mainly looking at lowering costs and building apps which have
better data handling capability.
Other members of the consortium include Samsung
), MediaTek and Opera Software. Reportedly, Facebook has already
spend $1.0 billion for developing infrastructure, much needed for
the implementation of the project.
After analyzing the rate of Internet penetration across the
globe, Zuckerberg concluded that there is a huge barrier in
developing countries when it comes to Internet access and
expansion of the Knowledge economy.
As per data collected by this group, only 2.7 billion people,
approximately 33.0% of the world's population, have access to the
Internet. The rate of Internet adoption increases by less than 9%
every year, implying that there is still a large section of the
population which remains underserved.
We believe that Zuckerberg has adopted a prudent business
strategy, wherein he could increase the reach and customer base
of Facebook, while making people more Internet savvy. Facebook
currently connects1.15 billion people and aims at having a user
base of 5 billion. Therefore, growing Internet accessibility will
help it to reach that milestone.
Facebook users increased 21.0% year-over-year during the
second quarter and intends to maintain or increase this growth
rate over the next several years By bringing more and more people
online, Facebook intends to grab a share of the pie.
Facebook is trying to align the interests of all group members
including mobile operators, devices manufacturers, developers and
even consumers. However, we believe that the initiative faces
significant headwinds related to costs on developing this massive
infrastructure, as many of its members are facing financial
crises.Moreover, internet unfriendly nations such as China and
North Korea, who tends keep a firm grip on the free-flow of
information among citizens pose a major threat for the
Nevertheless, we believe this is a commendable effort from
Facebook and its compatriots. The project's success will
significant their penetration into the developing economies of
Asia-pacific, Latin America and Africa.
Additionally, we believe that Facebook's recent partnership
) will also add to its user base. We also expect the company to
continue to pursue strategic acquisitions going forward.
Currently, Facebook has a Zacks Rank #2 (Buy).
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