3 Reasons Why Facebook Will Outperform

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After breaking down the numbers, despite some short-term obstacles, it looks like Facebook is going to outperform. Here’s are 3 reasons why:

3) Active User Growth

Facebook broke the 1 billion monthly active user milestone in the third quarter with relatively modest fanfare. It’s a large number that ostensibly means good things for the social network, but without context it’s a pretty empty value. Big numbers are great, but how and why are they growing? And, as we’ll look at later, how are they being monetized?

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Here’s a breakdown of where Facebook’s monthly active user base is growing and how fast for the two-year and year-over-year periods. All told, total Facebook monthly active users grew 73.7 percent over the past two years, and 25.0 percent year over year.

U.S. and Canada Europe Asia Rest of World
Q4 2010 to Q4 2012 +25.3% +42.6% +115.9% +128.6%
Q4 2011 to Q4 2012 +7.8% +14.0% +40.5% +35.1%

The rate of overall growth is slowing, but this is to be expected. At a glance it’s easy to tell that growth in the U.S. and Canada has fallen to a single-digit pace, suggesting that these markets are closer to saturation than other geographic regions. Europe is well on its way to hitting a similar level.

The “rest of the world” segment, which notably includes South America, grew the most over the two-year period, but was outpaced by Asia in the last year. This suggests that Facebook will be seeing most of its future user growth in the near-term from Asia.

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