Here's Why Facebook Will Succeed With Drones

Facebook wants to use drones to provide Internet to impoverished areas of the world. Will Amazon and Google allow the project to be successful?

Apr 29, 2014 at 11:00PM

After Amazon (NASDAQ:AMZN) announced that it wanted to enter the drone space, Facebook (NASDAQ:FB) also declared the same intention. Facebook wants to use drones to bring the Internet to impoverished areas. However, analysts feel the company might not be in the drone game purely to bring Internet services to those who would otherwise not have them. The prospects in a drone network, the potential for more advertisement revenue, and the possibility of converging the drone project with financial services will allow Facebook to benefit in the long run.

The prospects in a drone network
Facebook reports that its efforts at beaming the Internet from the sky have doubled the number of people in the Philippines and Paraguay who use mobile data. Facebook's partnerships in the project let 3 million new people access the Internet. Recently, Facebook acquired Ascenta for $20 million. The new company joins Facebook in working on a connectivity aircraft project. Facebook says more than 5 billion people worldwide have yet to be connected to the Internet. If more than 1 billion people access Facebook through the effort, the company will benefit.

Online payments
Facebook's representatives are said to have been in talks with several money services to make a Facebook payment platform a reality. The convergence of a drone network, social media, and financial services should see a profound shift in how people view their capital. Gartner
expects the global mobile transaction volume and value to average 42% annual growth from 2011-2016. If everything goes to plan, Facebook users will apparently be offered the chance to store and transfer money on the site.

Advertisement revenue
Drones will be important in the future. Companies that have a wide range of products to offer different businesses will do well. With a network of drones blanketing the planet, Facebook will have the ability to collect all sorts of data and target users for an increase in its advertisement revenue. According to The Guardian, the global ad market was worth $500 billion in 2013. Its growth is expected to be 5.3% this year and almost 6% in 2015 and 2016.

Amazon's reasons for entering the drone space are directly related to growing its businesses. The project will enable Amazon to increase its revenue by offering immediate delivery of products. Amazon has already tested its fifth and sixth-generation aerial vehicles. Signs point to the expansion of the mail order sector.  The global mail order market is forecast to reach $835 billion by 2015, according to a research from Global Industry Analysts.

Google has been working on its own unmanned technology for some time now. The tech giant seems to be focused on using the technology for the development of a driverless car. Eight of its 12 acquisitions in the last 12 months have something to do with robotics. With the drones project, Google could benefit on a long-term basis. IHS Automotive predicts that 9% of cars will be driver-less by 2035. 

Foolish takeaway
Facebook said its interest in the drone sector is confined to providing Internet access to impoverished areas. However, it might not be in the drone game for purely altruistic reasons. The prospects in a drone network, the possibility of more advertisement revenue, and potential with an online payment business will allow the company to improve its top line.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Mark Girland has no position in any stocks mentioned. The Motley Fool recommends The Motley Fool owns shares of, Facebook, and Google (C shares). 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers