Matt Britton, Scott Galloway, and Rich Greenfield debate Facebook's future on CNBC. They argue the company has massive untapped potential in TV ads, e-commerce, and its data layer, while Instagram grows like a supernova. User growth is slowing in mature markets, but Facebook added roughly 23 million users globally.
Facebook is just getting started in terms of their ability to monetize their users. Now you talk to 10, 11, 12 year old kids, don't even know what a TV network really is. Right now people are tuning in to YouTube, they're tuning in TV programmatically. Facebook is in a position with 2 trillion posts of information from users to be able to target any ad on television. Facebook hasn't even touched E commerce yet. So there's so many individual places Facebook can go into to actually grow its amount of revenue per user. I think a little bit too much is being made on the growth of their actual user base right now.
Scott, what's your take in terms of where things are heading on ads, sales overall for them and the balance they may have in the future between ads and subscriptions? Particularly when you consider WhatsApp?
Oh, you know, I think we're sort of all in violent agreement here. The platform has this supernova business. Instagram. I was at the World cup last week, the final in Moscow and 80,000 people, probably 20,000 hardcore soccer fans and then the other 60,000 are arguably some of the masters of the universe are the most influential or wealthy people in the world. And I looked around and said what brand or product, product or service is most present here? And it wasn't Coca Cola, it wasn't Budweiser, it wasn't Adidas, it was Instagram. Literally every person under the age of 40 had their Instagram app up. And when you think about the targeting ability, you think about there the decline of the advertising industrial complex and those dollars looking for a place to go. I mean this is, it's a supernova business model. I don't see it slowing down. And by the way, I am not a fan of Facebook. I think this was punishment for a series of half measures and weak leadership about some of the very real issues they face. And the market had some pent up fury that they unleashed on last night on Facebook.
Scott, do you put yourself the World cup final in the bracket of masters of the Universe or a real soccer?
Soccer fan, 10 year old, a 10 year old who plays goalie and Delray AC I was there on one of those lifetime trips.
Back to the punishment you just mentioned from investors. Was it also a punishment from consumers? Particularly when you look at the numbers in Europe and the slight flattening off of the user growth and could that be extrapolated going forward or do you believe that the arguments we just heard from Rich Greenfield that already that was a 1/4 effect only because of the likes of GDPR.
Okay, so the company had the greatest loss in market capitalization in history because it was the fourth most valuable company and can lose that kind of value and still, and still be up on the year. The, the user growth is slowing in Canada and the U.S. on the core platform because everybody's on it and you're going to see, you're going to start to see growth or they're going to report growth off of WhatsApp, Instagram and Instagram stories. But the globally, they added I think 23 million users. So, you know, oh no, they only added the population of Texas in the last 12 weeks. The user growth here is still staggering and may not have met expectations. But when I first saw the print here, I first saw the press release, I wasn't entirely sure the market wasn't going to take the stock up. They beat on the bottom line. They missed slightly on the top line and slightly in revenue.
It was really the conference call, I mean, that was, that was most disappointing. Yeah, well, I just think the biggest misconception about Facebook is that it's just a destination. When in reality the future of Facebook is as a data layer. It almost doesn't matter how many people are actually coming to the platform on the front end. They have so much data that in 10 years from now when Ford advertises, it's going to be able to advertise towards people that want an SUV who has their lease exp retiring in 30 days on, on television. Not just targeting to an 18 to 49 demographic. And there's $70 billion in the US alone right now. It's been on television. And that is a piece of the pie that they've yet to get. So I just think the street really doesn't understand the business model of Facebook puts too much into it as a media company. This is not Yahoo. Right. This is not a company. It's aggregating eyeballs to sell advertising to. They have more data than any company in history. Which is, Scott has pointed out a lot. I'm sorry, more than Google. I mean, arguably, yes, because consumers are inputting information into Facebook every single day. I mean, YouTube, Google is YouTube user generated content. But Facebook is Instagram as WhatsApp is Messenger as a Facebook platform. So its power I think is unrivaled. And I think just like how the stock Price dropped to 18 when they shifted from display to mobile and you had people here on TV saying, oh, it's going down and down. It's 91% mobile. There you go. So I think this is that reincarnated again, and I think people are going to regret not buying it at this point.
