Why there's still a chance to make money from Facebook

by , 02 October 2015

Go back ten or 15 years ago and the idea of social media seemed foreign to most. But fast forward to the present day and social media is a vital part of so many people's lives.

Facebook is the most popular example of this.

So has the opportunity for gains in Facebook passed or is there still time to make money from the rise of this social media stock?

Let's take a closer look…

Facebook shares continue to rise

Shares in Facebook are up nearly 18% in the past year. It’s currently trading at around $91. And it looks like further gains are likely for the social media giant.

This is down to key acquisitions. These should help to push Facebook’s share price higher and boost revenue.

There are three main factors that will ensure Facebook continues to perform, Jack Delaney in Money Morning US explains:

  • WhatsApp;
  • Instagram; and
  • Growth in emerging markets.

Why these three factors will help grow Facebook

WhatsApp and Instagram
There have been concerns that younger users of social media are not using Facebook, but Mark Zuckerberg has got WhatsApp to allow users to communicate and share media free of charge.

From just April to September, the number of active users of WhatsApp rose 11% or 100 million. It now has 900 million monthly active users.

Instagram works by allowing users to upload and share photos. It now has 400 million monthly active users. This is more than Twitter.

These users will help drive Facebook’s revenue higher thanks to mobile ads. Mobile ads make up more than three-quarters of Facebook’s revenue from advertising, coming in at $2.9 billion.

Emerging markets
At the moment, Facebook use in countries such as India is still small. This means there is enormous scope for its use to grow.

Analysts on Yahoo! Finance pencil in a one-year price target for Facebook at $111.60. That’s 20% higher from its current price.

So there you have it. Why there’s still a chance to make money from Facebook.

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Why there's still a chance to make money from Facebook
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