Business Overview and Segments
This is the parent company of the social media platform – Snapchat. Snapchat 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 Snapchat, 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 |
| ROIC (Quality) | N/A – Money-Losing |
| Last Year’s Growth | 44% (High) |
| Free Cash Flow Margin (Company Strength) | N/A – Money-Losing |
Key Facts
| Green Flags | Red Flags |
| High Growth | Very Expensive |