I’m young enough not to be able to remember much of the internet before Facebook (NASDAQ:FB). I simply remember my internet use consisting of a lot of AOL Instant Messenger, shady peer-to-peer file sharing software, and those sites teenage boys inevitably discover.
But Facebook has completely transformed the way we use the internet. In fact, some people in developing countries don’t understand they’re using the internet when they access Facebook on their phones.
Facebook has managed to grow well beyond anyone’s expectations from a decade ago. It’s grown beyond expectations from just four years ago, when the company’s IPO was deemed a failure. It’s now one of the biggest companies in the world.
Here, then, are 100 facts about Facebook investors should consider.
1. Facebook has 1.71 billion monthly users.
2. There are about 3 billion internet users worldwide.
3. Facebook has penetrated so much of the existing market of internet users that it’s trying to figure out how to make more internet users.
4. It’s using things out of science fiction novels such as solar-powered drones, lasers, satellites, rockets, and AI-powered software developed through its Internet.org initiative to provide internet access to more people.
5. The fastest-growing market for internet users is India.
6. India’s government rejected Internet.org’s Free Basics app, which offers free access to select internet services, on the grounds it violates net neutrality.
7. India’s internet population grew about 40% last year, and it’s accelerating.
8. Facebook has 142 million users in India.
9. It will soon surpass the U.S. as Facebook’s largest market.
10. Facebook’s average advertising revenue per user in the Asia-Pacific region, of which India is a part, was just $1.74 last quarter.
11. Facebook brought in $13.74 per user in the U.S. and Canada.
12. That $1.74 per user in Asia-Pacific is still more than Twitter‘s (NYSE:TWTR) global average ad revenue per user last quarter.
13. If the number of Facebook users in India grows another 40% this year, Facebook will add the equivalent of about one-fifth of Twitter’s user base with about the same revenue potential.
13a. And that’s just India.
14. Facebook is the second largest digital advertising company after Google, the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) subsidiary.
15. Facebook grew its advertising revenue 57% last year.
16. Google grew ad revenue just 17%.
17. Everybody else grew ad revenue just 13%.
18. Facebook’s revenue growth is accelerating this year.
19. Revenue grew 56% in the first half of 2016, versus 40% in the first half of 2015.
20. Facebook CFO Dave Wehner says the company has mostly maxed out the number of ads it can place in users’ news feeds.
21. Ad revenue growth will have to come from user growth, improved engagement, and increased ad prices.
22. It’s a good thing everyone is addicted to Facebook.
22a. That is, if you’re a Facebook investor.
23. Zuckerberg says the average Facebook user spend 50 minutes per day between Facebook, Instagram, and Messenger.
24. That’s up 25% from two years ago.
25. Facebook is still extremely popular with millennials. No matter what anyone tries to tell you.
25a. That includes former CFO David Ebersman.
26. The average user between the ages of 18 and 34 spends more time on Facebook-owned social networks than the average time spent on Snapchat, Twitter, Pinterest, Tumblr, LinkedIn, Google+, and Vine combined.
27. Facebook users watched more than 8 billion videos on its platform per day during the third quarter last year.
28. Facebook wants users and brands to “go live” with their video this year.
29. That’s because users spend three times as long watching live videos compared with pre-recorded videos.
30. Facebook is paying celebrities and publishers more than $50 million to “go live.”
31. It’s now testing mid-roll ads for live streams.
32. Zuckerberg and Co. still haven’t really figured out how to monetize all those video views.
33. Facebook has 3 million active advertisers.
34. It added about 100,000 new advertisers per month from October through February.
35. Twitter has just over 100,000 advertisers total.
35a. 130,000, to be exact.
36. Facebook has 60 million active businesses with pages on its network.
37. Facebook has consistently kept that 5% penetration rate since hitting 1.5 million active advertisers more than two years ago.
38. Twitter has penetrated only about 1.4% of businesses on its platform.
39. There are an estimated 420 million to 510 million small and medium-sized businesses worldwide.
40. If Facebook could get about half of those businesses to create pages and maintain its penetration rate, it could quadruple its active advertisers.
41. With stable ad loads and relatively modest user growth, the demand for advertisements will cause Facebook’s average ad prices to climb.
42. Facebook’s ad prices increased 9% last quarter thanks to “particularly strong” advertiser demand.
43. Many of Facebook’s existing advertisers are spending more on average this year compared with last year.
44. Instagram ads were mostly cannibalistic last year, according to William Blair’s Ralph Schackart.
45. It’s expected to be more incremental this year, providing an additional avenue for growing spend from advertisers.
46. Instagram’s average ad prices are three times higher than Facebook’s on a cost-per-click basis.
47. Instagram just rolled out new business tools to make the platform more attractive to small and local businesses.
48. One of Facebook’s biggest money makers are app install ads.
49. Citi estimates that 1.15 billion apps will be downloaded through marketing on Facebook properties this year.
50. That’s up 33% from last year.
51. Facebook generates an estimated $3.40 per app install.
52. That means Facebook will generate nearly $4 billion from app installs this year.
53. Apple (NASDAQ:AAPL) generated about $6 billion from app installs in 2015.
54. Apple’s App Store generated 75% more revenue than the Google Play Store last year, according to estimates.
55. Which means Facebook is on pace to generate more revenue from app installs this year than Google’s Play Store did last year.
56. There are over 1 billion users on Messenger.
57. And 1 billion on WhatsApp, too.
58. There are 50 million business accounts on Messenger.
59. Those business accounts exchange more than 1 billion messages per month with users.
60. Tencent‘s WeChat has “just” 806 million users.
61. And “only” 10 million businesses.
62. LINE has 157 million users.
63. And 2 million official brand accounts.
64. Both generate more revenue than either Messenger or WhatsApp.
65. Which will bring in a combined $0 for Facebook this year.
66. WeChat generates more than $7 in revenue per user, according to estimates.
67. The vast majority of WeChat’s users are in Asia, where Facebook generated $6.32 per user over the past 12 months across all of its platforms.
67a. Again, none of that came from its messaging apps.
68. LINE generated $1.2 billion in revenue last year from games, stickers, and advertisements.
69. LINE currently has a market cap of around $9.6 billion.
70. Facebook bought WhatsApp for $21.8 billion in cash and stock.
71. It also bought Oculus for $2 billion in cash and stock.
72. The Oculus Rift is seeing “increasing demand from retail as stores plan for the holidays.”
73. Zuckerberg says, “Virtual reality has the potential to be the next computing platform that changes all our lives.”
74. More than 1 million people already use Oculus on their phones through Samsung Gear VR.
75. Zuckerberg says he doesn’t really want to make big acquisitions as he did with Oculus and WhatsApp.
76. But Zuckerberg could soon have a lot of cash to spend if he wants.
77. Facebook’s free cash flow over the past 12 months was $7.6 billion.
78. Its cash reserve reached $23.3 billion last quarter.
79. Analysts expect the company to produce $26 billion in free cash flow by 2020.
80. That’s more than Microsoft currently generates ($25 billion TTM).
81. But analysts don’t have a very good track record forecasting the long term for Facebook.
82. In 2013, the consensus estimate for Facebook’s earnings in 2017 was just over $2 per share.
83. Facebook already generated $1.74 in non-GAAP EPS in the first half of 2016.
84. Now analysts are expecting earnings of $5.04 per share in 2017.
85. The average 2020 estimate (for those so bold) is $9.64 per share, adjusted for stock-based compensation.
85a. Set a reminder now to come back to this article in four years.
86. Facebook currently trades for about 25 times next year’s earnings estimate.
87. Alphabet trades for about 19 times next year’s earnings estimate.
88. Microsoft trades for about 18 times next year’s earnings estimate.
89. Even if Facebook’s earnings multiple falls to somewhere between Alphabet’s and Microsoft’s over the next three years, the stock would still be worth around $180.
89a. That’s assuming the analysts have it right this time.
90. That’s an annual return of about 11.7% from today’s price.
91. Zuckerberg’s net worth is about $55.4 billion.
92. That makes him the the fifth wealthiest person in the world, behind Microsoft’s Bill Gates, Zara’s Amancio Ortega, Berkshire Hathaway‘s Warren Buffett, and Amazon.com‘s Jeff Bezos.
93. Zuckerberg is just 32 years old.
94. The next youngest billionaire in the top five is Jeff Bezos (52).
95. If Zuckerberg can increase his wealth 11.7% per year, on average, he’ll be a trillionaire before 60.
95a. To paraphrase Justin Timberlake’s version of Sean Parker, “A billion dollars isn’t cool. You know what’s cool? A trillion dollars!”
95b. Also, the idea of a trillionaire is so ridiculous that Microsoft Word is telling me it’s a spelling error.
96. Facebook stock has increased an average of 32% per year since its IPO at $38 per share.
96a. At that pace, Zuckerberg would be a trillionaire in 10 years.
97. Gates’ net worth reached $100 billion in 1999, when he was 43.
98. He’s now worth “just” $79.5 billion at 60 years old.
98a. So, projecting that far into the future is a bit dubious.
99. Both Zuckerberg and Gates have pledged to donate the vast majority of their wealth to charity.
100. Now that I’m finished writing this article, I’m looking up ways to qualify myself as a charitable organization.
– Stock investment