Facebook (NASDAQ:FB) is a monolith in the social media and online advertising space, this goes without saying. But every now and then, it's good to step back and get a sense of just how massive the company currently is and what further growth lies ahead of it.
Ad revenue per monthly active user
The company's high ad revenue per user relative to peers like Twitter (NYSE:TWTR) is a testament to the platform's highly targeted advertising capabilities and the effectiveness of promotional videos in user feeds.
This metric has nearly doubled over the past two years as the company has honed its ability to present its users relevant ads and advertisers encouraging ROI's -- the company is famously selective when it comes to its new video spots, commanding a cost of $1 million per day and only "inviting" certain brands to submit concepts.
As if investors were worried, Facebook's acquisition track record demonstrates Mark Zuckerberg and Co. are unfamiliar with the word "complacency." Interestingly, the majority of the company's acquisition spend has come in the past two years with user growth for its namesake service having slowed in the U.S. and Europe. As its flagship service continues to climb toward optimal monetization, the company has keyed in on other high-growth potential businesses and services to keep innovation alive and investors happy.
The company will look to integrate and monetize recent acquisitions, specifically picture sharing platform Instagram, messaging service Whatsapp and virtual reality innovator Oculus. With over $3 billion in cash on the books, the company's spending spree could be far from over.
But Facebook is far from saturation!
While the user bases domestically and in Europe are experiencing slowing growth, the platform is enjoying strong expansion in Asia, Africa and Latin America. At $1.05 in revenue per user, the Asian segment of Facebook's user base lags the more lucrative North American and European groups, which posted ARPU's of $6.41 and $2.82, respectively during Q2. That said, in the future, this part of the world could become an increasingly impactful element of the company's top-line -- ARPU for Asian users has grown 13.5% in 2014, more than any other part of the world.
Since we're taking a global view...
Research from the United Nations International Telecommunications Union indicates that over 3 billion people will have access to the Internet by the end of 2014. With roughly 1.3 billion monthly active users currently, the social media platform is set to have roughly 40% of the global Internet population as regular users. That is unparalleled network effect at play.
Dylan Lewis has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook and Twitter. 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.