For Investors, the Key Questions About Facebook’s Business Right Now

First WhatsApp. Then Oculus. Now a distinct Facebook messaging app. Will a more federated structure be good for Facebook’s business?

Apr 23, 2014 at 3:30PM
Facebook News Feed Laptop

Credit: Facebook.

Facebook's (NASDAQ:FB) business isn't what it used to be. Rather than a tightly integrated social network that hoped to engage you for hours each day, CEO Mark Zuckerberg is assembling a federation of loosely coupled technologies that could impact how we interact with each other and the world around us. Fool contributor Tim Beyers explains the implications in the following video.

Earlier this month, TechCrunch reported that Facebook's business plan is to require smartphone users to install a separate messaging app for chatting with friends. The thinking, apparently, is that having a distinct app will improve messaging performance.

We'll need months of data to know whether that's true. In the meantime, the shift comes amid several acquisitions that will remain at arms length from Facebook's core business. WhatsApp is to remain a separate but related service. Oculus VR is expected to receive similar treatment. We now have legitimate cause to refer to Facebook's business structure as a conglomerate.

Where does that leave investors? Searching for answers, Tim says. Zuckerberg has to use the upcoming earnings call to clarify his strategy for extracting value from Facebook's federated collection of properties. He needs to explain how users and shareholders will benefit over the long term. And finally, how to know when (or if) the strategy is taking hold.

Now it's your turn to weigh in. What do you expect from Facebook's business now that Zuck and his team are asking users to commit to a loose collection of apps and technologies rather than a single platform? Please watch the video to get the full story and then leave a comment to let us know your take, including whether you would buy, sell, or short Facebook stock at current prices.

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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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