Facebook delivered a monster quarter, but it seemed that all anyone could focus on was a comment about how younger teens have decreased usage and how the company does not expect to significantly increase ads as a percentage of news feeds. The result? We got a real dead-horse beating about the peaking of Facebook and, even though ad revenue grew 60% and mobile ads are now 49% of the business and the company generated $1.8 billion in ad sales, you left the call with a sense that Facebook's best times are behind it.
Of course that's fatuous logic in that revenues for video and Instagram haven't even hit yet and the company is just scratching the surface of the ad market. Given that digital media now represents a much bigger part of viewing than television, specifically 5.25 hours a day for Internet vs. 4.5 hours for TV and the fact that Facebook has one in eight minutes of that time of desktop and one in five minutes on mobile, that's a lot of time to monetize.
But the analysts saw it differently, contending, at least from the questions, that the company has a self-imposed limit of how much advertising it can offer without spoiling the user experience, with an undertone that younger teenagers must already be turned off by the ads.The Q&A turned the biggest upside surprise of the season into a downer, and it shouldn't have been. There's no slowing here that I can find, but I felt very lonely with that viewpoint after listening to the interplay. The Starbucks call also had a denouement feel about it. There was a sense among the analysts that Starbucks can't possibly exceed what it's done already. At one point it got so difficult that Howard Schultz mentioned that the "tension between us and you regarding comparable growth guidance" had gotten out of hand and it would be irresponsible to say that Starbucks will beat the 8% comps in the Americas and 7% overall.
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