source: wallpaper.wiki

Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. Its solutions include Facebook Website and mobile application that enables people to connect, share, discover, and communicate each other on mobile devices and personal computers; Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application to communicate with people and businesses across platforms and devices; and WhatsApp Messenger, a mobile messaging application. The company also offers Oculus virtual reality technology and content platform, which allow people to enter an immersive and interactive environment to play games, consume content, and connect with others. As of December 31, 2016, it had approximately 1.23 billion daily active users. Facebook, Inc. was founded in 2004 and is headquartered in Menlo Park, California.

BUSINESS ANALYSIS OF FACEBOOK

source: techcrunch.com

The Technology Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Facebook compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Facebook to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

  1. Revenue Growth: Facebook reported a revenue growth of 54.2% year-on-year during 2016. Internet Industry grew at 23.3% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Facebook spent 13.7% of its total revenues on COGS. Internet industry average (COGS share of revenue) in the same period was 46.3%
  3. R&D; share of Revenues: As a percentage of revenue, Facebook spent 21.4% of its total revenues on R&D.; Internet industry average R&D; spending in the same period was 12.6%
  4. SG&A; share of Revenues: As a percentage of revenue, Facebook spent 19.9% of its total revenues on Sales, Marketing, and General Administration (SG&A;). Internet industry average SG&A; spending in the same period was 20.2%
  5. Inventory share of Revenues: Facebook Inventory share of Revenues details are not available because either company does not share the data or we do not have it
  6. Accounts Payable share of Revenues: As a percentage of revenue, Facebook invested 2.1% of its total revenues on Accounts Payable (A/P) Internet industry average Accounts Payable investment in the same period was 18.0%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Facebook invested 14.4% of its total revenues on Accounts Receivable (A/R). Internet industry average Accounts Receivable investment in the same period was 16.2%
  8. PP&E; share of Revenues: As a percentage of revenue, Facebook invested 31.1% of its total revenues on Property, Plants, and Equipments (PP&E;). Internet industry average PPE investment in the same period was 24.0%
  9. Intangibles share of Revenues: As a percentage of revenue, Facebook invested 74.7% of its total revenues on Intangibles. Internet industry average Intangibles investment in the same period was 32.7%
  10. Net Margins: Facebook Net Margins in the year 2016 were 37.0%. Internet industry average Net Margins in the same period were 12.2%

SECTOR AND INDUSTRY ASSOCIATION OF FACEBOOK

source: viralcontentlab.com

For the purpose of performance benchmarking of a company with a sector or industry average, R&P; Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Facebook is associated with Technology Sector and Internet Industry.

Technology sector is comprised of the following industries: Computers Systems and Peripherals; Software; Semiconductor; IT Consulting and Outsourcing Services; Networking Equipment and Services; Internet; Other. The definitions for each of the industries is as follows:

  • Computers Systems and Peripherals industry includes companies primarily engaged in manufacturing of personal computers, servers, mainframes, workstations, and other computer accessories and peripherals such as storage drives, mice, keyboards and printers. It also includes manufacturers of mobile phones and tablets.
  • Software industry includes businesses providing software products such as operating systems, productivity suites, enterprise software, data and analysis software, advertising and marketing software, engineering and manufacturing software, networking software, and IT management software. It also includes companies providing industry-specific software focused on different sectors such as Financials, Automotive, Telecom, Utilities, Travel, Real Estate, Media, and Publishing.
  • Semiconductor industry includes companies primarily engaged in manufacturing and distribution of semiconductor products such as microprocessors, chipsets, motherboards, flash memory, and wired and wireless connectivity products. It also includes companies that provide semiconductor equipment and services to the semiconductor industry.
  • IT Consulting and Outsourcing Services industry includes companies primarily engaged in providing information technology consulting and outsourcing services to other businesses. The services include IT consulting, systems integration, application development and management, IT infrastructure management, and network operations management.
  • Networking Equipment and Services industry includes companies primarily engaged in manufacturing and distribution of networking and communications equipment for transporting data, voice, and video traffic across intranets, extranets, and the Internet. The key products include routers and switches for local and wide-area networks, cable modems, teleconferencing equipment, and wireless access points.
  • Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Health, Real Estate, Media, and Publishing.
  • Other industry includes companies providing products such as photocopiers, fax machines, point of sale machines, audio/video technologies, and video games. It also includes technology companies that are not part of other six technology industries.

INDUSTRY RANKING OF FACEBOOK

source: rau.ua

With $27.6 billion revenues, Facebook ranked number 3 of all the companies in the US Internet industry. There were a total of 74 public companies in the US Internet industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Internet industry by revenues during 2016 were:

  1. Amazon ($136 billion)
  2. Alphabet ($90.3 billion)
  3. Facebook ($27.6 billion)
  4. PayPal ($10.8 billion)
  5. Priceline Group ($10.7 billion)
  6. eBay ($9 billion)
  7. Netflix ($8.8 billion)
  8. Expedia ($8.8 billion)
  9. Yahoo ($5.2 billion)
  10. Wayfair ($3.4 billion)
source: jtvdigital.com

BUSINESS MODEL ANALYSIS (BMA) FRAMEWORK

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

INDUSTRY PEERS AND COMPETITORS OF FACEBOOK

Amazon (AMZN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

Amazon.Com, Inc. with $136 billion revenues in the year 2016 was the number 1 Internet company. Read this report to know the top competitors of Amazon and identify growth and cost optimization opportunities of Amazon

Alphabet (GOOGL) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

Alphabet Inc. with $90 billion revenues in the year 2016 was the number 2 Internet company. Read this report to know the top competitors of Alphabet and identify growth and cost optimization opportunities of Alphabet

PayPal (PYPL) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

PayPal Holdings, Inc. with $11 billion revenues in the year 2016 was the number 4 Internet company. Read this report to know the top competitors of PayPal and identify growth and cost optimization opportunities of PayPal

Priceline Group (PCLN) Business Analysis – Analyze Historical Performance, Strategic Priorities,…

Priceline Group Inc. with $11 billion revenues in the year 2016 was the number 5 Internet company. Read this report to know the top competitors of Priceline Group and identify growth and cost optimization opportunities of Priceline Group

eBay (EBAY) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

Ebay Inc with $9 billion revenues in the year 2016 was the number 6 Internet company. Read this report to know the top competitors of eBay and identify growth and cost optimization opportunities of eBay

Netflix (NFLX) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

Netflix Inc with $9 billion revenues in the year 2016 was the number 7 Internet company. Read this report to know the top competitors of Netflix and identify growth and cost optimization opportunities of Netflix

REVENUES ANALYSIS

Facebook (FB) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Facebook Inc (FB) from 2012 to 2016. Facebook generated a total of $27.6 billion revenues during 2016. Facebook reported a revenue growth of 54.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Facebook (FB) Revenues And Revenue Growth From 2009 To 2016

This report provides the last eight years revenues and revenue growth of Facebook Inc (FB) from 2009 to 2016. Facebook generated a total of $27.6 billion revenues during 2016. Facebook reported a revenue growth of 54.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Facebook (FB) Revenue Growth Comparison With Industry Growth From 2012 To…

This report provides a comparison of Facebook Inc (FB) revenue growth with Internet industry growth during the last five years from 2012 to 2016. Facebook reported a revenue growth of 54.2% year-over-year during 2016. The Internet industry growth was 23.3% year-over-year during 2016. Facebook growth was faster than the industry during 2016.

PROFIT ANALYSIS

Facebook (FB) Net Profit And Net Margin From 2012 To 2016

This report provides the last five years net profit and net margin of Facebook Inc (FB) from 2012 to 2016. Facebook reported a total net income of $10.2 billion during 2016. Facebook generated a total of $27.6 billion revenues during 2016. Facebook net profit margin was 37% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.

Facebook (FB) Net Profit And Net Margin From 2009 To 2016

This report provides the last eight years net profit and net margin of Facebook Inc (FB) from 2009 to 2016. Facebook reported a total net income of $10.2 billion during 2016. Facebook generated a total of $27.6 billion revenues during 2016. Facebook net profit margin was 37% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.

Facebook (FB) Net Profit Margin Comparison With Industry From 2012 To…

This report provides a comparison of Facebook Inc (FB) net profit margin with Internet industry net profit margin during the last five years from 2012 to 2016. Facebook reported a net profit margin of 37% during 2016. The Internet industry net profit margin was 12.2% during 2016. Facebook was more profitable than the industry during 2016.

COST & EXPENSES ANALYSIS

Facebook (FB) Cost of Sales (COGS) Analysis From 2012 To 2016

This report provides the last five years cost of sales (COGS) analysis of Facebook Inc (FB) from 2012 to 2016. Facebook spent a total of $3.8 billion on COGS during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook spent 13.7% of its total revenues on COGS during 2016. The cost of sales (COGS) numbers are for the fiscal year ending in December.

Facebook (FB) Research & Development (R&D) Spending Analysis From 2012 To…

This report provides the last five years research and development (R&D;) expenses of Facebook Inc (FB) from 2012 to 2016. Facebook spent a total of $5.9 billion on research and development (R&D;) activities during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook spent 21.4% of its total revenues on R&D; activities during 2016. The R&D; spending numbers are for the fiscal year ending in December.

Facebook (FB) Sales, Marketing, General & Administrative (SG&A) Spending Analysis From…

This report provides the last five years sales, marketing, general & administrative (SG&A;) expenses of Facebook Inc (FB) from 2012 to 2016. Facebook spent a total of $5.5 billion on sales, marketing, general, and administrative (SG&A;) activities during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook spent 19.9% of its total revenues on SG&A; activities during 2016. The SG&A; spending numbers are for the fiscal year ending in December.

WORKING CAPITAL ANALYSIS

Facebook (FB) Inventory Spending Analysis 2016

Inventory spending analysis for Facebook is not available because either the company does not provide the data or we don’t have it.

Facebook (FB) Accounts Receivable (A/R) Analysis From 2012 To 2016

This report provides the last five years Accounts Receivable (A/R) analysis of Facebook Inc (FB) from 2012 to 2016. Facebook invested a total of $4 billion on accounts receivable during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook invested 14.4% of its total revenues on accounts receivable during 2016. The accounts receivable numbers are for the fiscal year ending in December.

Facebook (FB) Accounts Payable (A/P) Analysis From 2012 To 2016

This report provides the last five years Accounts Payable (A/P) analysis of Facebook Inc (FB) from 2012 to 2016. Facebook invested a total of $582 million on accounts payable during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook invested 2.1% of its total revenues on accounts payable activities during 2016. The accounts payable numbers are for the fiscal year ending in December.

ASSET MANAGEMENT ANALYSIS

Facebook (FB) Property, Plant & Equipment (PP&E) Investment Analysis From 2012…

This report provides the last five years property, plant & equipment (PP&E;) investment analysis of Facebook Inc (FB) from 2012 to 2016. Facebook invested a total of $8.6 billion on property, plant & equipment (PP&E;) activities during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook invested 31.1% of its total revenues on PP&E; activities during 2016. The PP&E; investment numbers are for the fiscal year ending in December.

Facebook (FB) Intangible Assets Analysis From 2012 To 2016

This report provides the last five years Intangible assets analysis of Facebook Inc (FB) from 2012 to 2016. Facebook invested a total of $20.7 billion on Intangible assets during 2016. Facebook generated a total of $27.6 billion revenues during 2016. As a percentage of revenues, Facebook invested 74.7% of its total revenues on intangible assets during 2016. The Intangible asset numbers are for the fiscal year ending in December.

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