A major catalyst in the ratings upgrade is the company's likely inclusion in the S&P 500. Stifel analysts note that "Facebook has been publicly traded for a little over a year now and with a market cap of nearly 60 billion, it is likely to be considered for inclusion in the S&P 500 in the next year."
The 9-year-old company would be right at home, as it would join other Internet giants such as Amazon (AMZN), Yahoo (YHOO), and eBay (EBAY). If included, Facebook would be the 59th largest company on the S&P index.
Analysts are also optimistic about Facebook's likely success in the online advertising space. According to analysts at JP Morgan, "Branded ad dollars continue to shift online and to social as advertisers and marketers allocate more of their annual spend to online channels. We believe this shift provides a tailwind to Facebook, as we consider Facebook to be one of the primary beneficiaries of increasing social ad budgets." Satisfying marketers is crucial for Facebook, as the company is expected to post over $5.8 billion in ad revenue alone by the end of the 2013 fiscal year.Noting this importance, Facebook is giving their advertising platform a facelift. Moving forward, companies will find advertising easier and more efficient. Facebook will do this through replacing quantity with quality. Zuckerberg's powerhouse believes that through reducing the number of ads while streamlining their design, marketers will see better results. Moreover, video and mobile advertisements could add new spheres of ad revenue. There is also optimism surrounding the trendy Facebook subsidiary, Instagram. Although this small social media service is not currently a significant revenue source, it is rising quickly. Jordan Rohan of Stifel notes, "It is estimated that there will be over 4 billion mobile phones worldwide by 2017, most of which will have a camera, and thus, any monetization of the platform will result in significant revenue to Facebook in the long-term."
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