The largesse that Facebook enjoys on desktop allows it to have such a strong presence on mobile devices, as users turn to phones and tablets for accessing the Menlo Park, Calif.-based social network. "While FB's greater amount of time spent certainly contributes to higher per-user monetization, it is not the reason for it," Sena said. "Rather, if we compare FB's mobile monetization to the industry on the basis of costper-minute (in thousands), we see a 9x differential, supporting our view that attribution and formats are the key gating factors to mobile, not screen size, both of which FB stands to help the industry resolve."
Facebook's scale on mobile is far greater than any other company on the Internet, accounting for nearly 22% of all the time spent by users. When factoring in Instagram and Whatsapp, that number rises, much higher than the next largest competitor, Apple (AAPL), which includes time spent in standard iOS apps. "Moreover, as the efficiency of the FB delivered ad improves with scale and data efficiency, it has the potential to further attract third-party buyer and seller. Therefore, we see this scale as possessing favorable network effect which bodes well for the initiative longer-term," Sena said in the note.
Facebook monetizes users in different parts of the globe differently, with the highest average revenue per user (ARPU) coming from the U.S. and Canada at $5.85 per user. If Facebook is able to get to that number for the 15% of the global smartphone market, that gives Facebook another $2 billion pro forma opportunity.
The upgrade comes at a time when Facebook and its users are particularly concerned about their privacy, as Facebook gets bigger in breath and scope. Today, the company announced then when a new user joins Facebook, "the default audience of their first post will be set to Friends," the company said in a statement. It had previously been set to Public.
Facebook also noted that for those who are already on the social network, the company will start rolling out "a new and expanded privacy checkup tool, which will take people through a few steps to review things like who they're posting to, which apps they use, and the privacy of key pieces of information on their profile."
At the company's F8 developer conference, CEO Mark Zuckerberg took several steps to address these concerns. "Over the years, one of the things we've heard just over and over again is that people want more control over how they share their information, especially with apps, and they want more say and control over how apps use their data," Zuckerberg said during the keynote.
Zuckerberg noted that people were scared to use the Login with Facebook button, because it required people to originally share all of their data with the app, and potentially intrude on their friends. As such, Facebook launched the Anonymous Login, a way for people to log into apps without sharing personal information from Facebook with developers. "By giving people more power and control, they're going to trust our apps more, and use them more. That's positive for everyone."
-- Written by Chris Ciaccia in New York
>Contact by Email.