Facebook (Nasdaq: FB) must hate some of its users. At a time when all eyes are on the company's top and bottom lines amid its overhyped IPO and subsequent plunge, down a third of its value from the offering price, the pressure is on.
Mark Zuckerberg made it clear in his letter to investors that Facebook was never started to be a company. Facebook has always been on a "social mission" and the dollars have always been secondary. Zuckerberg has always maintained that the company isn't in it for the money. As fellow Fool Morgan Housel put it on Facebook's first public day, "Well, the money's in it for you, buddy."
Well, when it comes back to the issue of user monetization, some Facebookers simply aren't carrying their weight. I've already outlined how both of Facebook's primary revenue sources are at risk, but let's dig a little bit deeper into the numbers.
Look at Facebook's payment platform revenue, the majority of which comes directly from social gamer Zynga (Nasdaq: ZNGA). And just like Zynga, a disproportionately small number of users actually pay up, boosting average revenue per user, or ARPU, for the rest of us.
In 2011, Facebook had just 15 million users who purchased virtual goods using Facebook Payments, and it didn't disclose that same figure for the first quarter. On the surface, that sounds great compared to the five million who paid up in 2010 (200% growth!), but it's still a drop in the bucket relative to the 845 million monthly active users, or MAUs, that Facebook had at the end of 2011.
That means only 1.8% of Facebook's MAU base carried payments revenue last year, which is roughly on par with the 1.9% paying portion of Zynga's user base.
A recurring theme that Facebook can't escape lately is its mobile Achilles' heel. You're likely well versed in this storyline by now, so I'll try not to belabor the point. Instead, let's look at what that means for Facebook's numbers.
The core advertising business alone brought in $872 million last quarter with 901 million MAUs. If you back out the 83 million MAUs who access Facebook exclusively on mobile devices and effectively aren't monetized, that turns out to about $1.07 in average advertising revenue per user. As mobile-only users continue to increase as the company expects, the pressure to monetize mobile news feeds will keep growing.
So mobile-only users currently contribute to neither advertising nor payments revenue, since Facebook's platform is desktop-based. On top of that, they're continuing to grow their ranks as Facebook beefs up its mobile offerings.
If Facebook doesn't hate them, it sure hates to love them.
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