This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

4 Major Facebook Growth Challenges

Monetize Mobile

Working out how to monetize mobile will be crucial, warns Jeff Sica, chief investment officer of Sica Wealth Management.

"To ensure long-term growth, Facebook needs to generate more revenue from mobile users who represent the largest percentage of growth," he explained, in an email to TheStreet. "In order to achieve this revenue, they must increase the time mobile users spend online to justify higher advertising fees. They must also shrink ad size for mobile users to increase the number of users."

"Facebook needs to make a full-scale effort in further monetizing not only the site's advertising revenue opportunities, but a major bang for their buck is to do the same in monetizing advertising revenues on the mobile side," added Scott Sweet, senior managing partner at IPO Boutique, also in an email. "Facebook has acknowledged that they have not been satisfactory in this area."

Facebook, which has 900 million monthly active users, said that its mobile products were used by 488 million users in March. The company, however, acknowledged in the regulatory filing for its IPO that mobile does not currently generate meaningful revenue.

Sweet adds that, with IPO money flooding in, Facebook should make boosting mobile ad revenue a top priority. The Menlo Park, Calif.-based firm, which raised its IPO price range earlier this week, expects net proceeds of $6.4 billion, assuming a price of $36, the midpoint of its projected range.

Bullish voices, however, predict that Facebook can dominate mobile. Sterne Agee analyst Arvind Bhatia, for example, recently said that Facebook could offer significant investor upside, citing rapid growth in mobile advertising, boosted by smartphones and tablets.

Key to success in this area, though, will be Facebook's ability to forge multiple deals with a host of companies. "We are devoting substantial resources to developing engaging mobile products and experiences for a wide range of platforms, including smartphones and feature phones," explained the company, in its S-1 filing. "In addition, we are working across the mobile industry with operators, hardware manufacturers, operating system providers, and developers to improve the Facebook experience on mobile devices."

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.38 +5.87 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs