On one side, it seems like just about "everybody" uses Facebook, and it has almost 1 billion users worldwide.
On the other side, some Wall Street traditionalists and even some novice investors insist Facebook has no sustainable business. In fact, if given a moment's notice, they will pull out their calculators to prove it to you.
What's more, these same investors are now reveling at that since the company's hype-filled IPO, the stock has dropped more than 50%. They will exalt that they were right.But so what? Consider this: Almost 15% of the world's population is now using Facebook. What this means is that aside from perhaps Google (GOOG), Facebook probably has the most robust consumer base in the world. The company's challenge is to prove that it can monetize these users and come up with an effective mobile strategy that will appeal to advertisers. Once it figures how to do this, it will have won half the battle. This is why I think it is in Facebook's best interest to make a play for Research In Motion (RIMM). Since I offered this argument last week, RIM's stock has risen almost 20%, and the stock could price itself out of Facebook's reach. The market already knows Facebook needs to make money off phones, and it needs RIM to do it. But the idea that the company is dead absent a move like this is ludicrous. This seems to be the prevailing notion among many -- particularly among investors who previously were too quick to confuse a "great idea" as in Facebook, with a "great business."
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