Japan drove its interest rates to negative zone last week to revive its sagging economy. Apple predicted that revenue in the current quarter will be lower than the year-ago quarter. Amazon shares plunged after the online retail giant posted quarterly earnings that fell short of estimates.
In the middle of all this, Mark Zuckerberg got richer by nearly $5 billion (or R 34,000 crore) overnight. Facebook’s shares surged 15.5% last Thursday, overtaking Amazon in market valuation. At $308.6 billion, Facebook was ahead of Amazon’s $296 billion. Apple is worth $519 billion and Google’s parent Alphabet Inc $500 billion.
Here’s why Facebook turned hotter. It now has 1.59 billion active users on a monthly basis (and more than 1 billion on a daily basis). That is bigger than the population of China or India. One in every four citizens on the planet is now on Facebook, making it not just a “cybernation” but a veritable superpower of sorts. With 900 million users of WhatsApp messenger and 400 million of Instagram – both of which it owns, the social networking giant is an awesome platform for advertisers. Facebook’s fourth-quarter revenue of $5.8 billion was way above market estimates.
Mobile ads account for 80% of the revenues. That should explain Facebook’s voracious appetite for India, on which rests its big growth bet. India’s mobile subscribers crossed 1 billion in January.
The contrast between worldwide economic hiccups and Facebook’s hypergrowth is glaring.
What’s up next? Facebook is ready to boost its Live Video feature. Started in December, this feature went beyond its pilot phase of using celebrities to iPhone users in the US last week. And we are weeks away from Android users in India telecasting on their Facebook pages. Which means nearly anybody who wants to create video media can potentially use Facebook as a platform.
India had 125 million Facebook users around the middle of 2015 and the number is expected to touch 161 million in 2016. Excluding Doodarshan’s direct-to-home services, the number of cable and satellite TV subscribers in India was about 139 million in 2014, and the figure is expected to reach 175 million by 2019.
We can see that Facebook is already overtaking the private cable TV households in India as it gears for a Live Video offering. The implications are significant. I expect Facebook to partner with Indian TV channels in the near future, going beyond its current set of five text-oriented publishers under its Instant Articles initiative. YouTube, owned by Google, had better watch out.