Business Overview and Segments
This is the social media powerhouse of the world, and if you thought Facebook was its only platform, you’re dead wrong. Facebook also owns Instagram and WhatsApp, with all of these platforms combining to give the company 2.6billion monthly active users – that’s 33% of the entire world’s population. Facebook earns money by putting ads on its platform, so its an advertising business. Why is this important to note? Because in a recession, everyone is short on money, and the first thing that businesses cut is their advertising expense. So just note that Facebook isn’t immune to a general economic downturn.
Network Effects – the more people who use Facebook or Instagram or WhatsApp, the more people that will be attracted to them to socialise with their friends, which will lead to more people using them, and so on.
Key Facts and Figures
| Risk of Bankruptcy | Low |
| Last Year’s Growth | 27% (High) |
| ROIC (Company Quality) | 41% (Very High) |
| Free Cash Flow Margin (Company Strength) | 20% (High) |