So I while back (in April) I wrote about $FB being a great bargain since the stock was beaten down and the engines of growth were still chugging along.
Now, with the departure of both the WhatsApp and Instagram founding team, I think the story has changed for the worse.
The core Facebook platform isn't as young anymore. Growth was slowly simply because of the law of large numbers. After the whole Cambridge Analytical scandal, a lot of people are gone. So the core offering is fundamentally broken.
But the Zuckerberg's genius move was to acquire platforms with untapped potential for network effects. WhatsApp and Instagram are both thriving partly because their network keeps compounding and partly because people don't associate the brand with core-FB's rubbish.
The core team leaving because of differences signals that FB hasn't figured out a way to keep these brands insulated any longer. The only monetisation strategy is still advertising, leveraged on user data. Users aren't as ambivalent to this model as they used to be.
So over time people will grow defensive and the platform will stop growing. Plus, Zuckerberg won't be able to acquire good platforms because young founders won't want to be associated with the FB culture or business model.
Am I missing something? What are your thoughts?
Submitted September 26, 2018 at 04:10AM by VisheshRai https://ift.tt/2QbjfFt
