Facebook Inc (FB) Earnings Call Transcript: 2014 Q3

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Some of the things like Search and some of these other products, this may sound a little ridiculous to say but for us products don’t really get that interesting to turn into businesses until they have about a billion people using them and also for Facebook we are there with news feed and that is why in the near term our priorities is really around continue to grow and serve that community and making sure that the business around news feed and those mobile ads fully reach their potential. Over a five year time frame we have a number of services which we think are well on their way of reaching a billion people. You know, Messenger, WhatsUp, Instagram and Search are a number of them.

Once we get to that scale then we think they will start to become meaningful businesses in their own right. I think the right way to think about that is to try to stay a repeatedly on these calls is not that we are going try to monetize them very aggressively in the next year or two because I really think for each of those categories the right strategy is to first focus on connecting a billion plus people and reaching the full potential for very aggressively turning them into businesses. But I do think this is such a big opportunity ahead of us. I can’t think of that many other companies or products that have multiple lines of products that are on track to reach and connect a billion people that have the clear path that how we can turn them into a business. So, that will be very fun and exciting challenge to work on over the next 5 years.

Operator

Your next question comes from Heather Bellini from Goldman Sachs. Your line is open.

Heather Bellini, Goldman Sachs

Right! Thank you for taking the question. I just had to, I guess one for Sheryl. If you could talk about, the comments she made on giving the advertisers better field for attribution, I was just wondering what percent of attribution do you find today is given to the last click and how overstated do you think that is right know? And then, just a follow up question for Dave. Given your total expense range from 50% to 70%, what are we’d seen in the past? I am just wondering how we should think about the low end versus the high end, under what scenarios you are thinking about those ranges.

Thank you!

Sheryl K. Sandberg, Chief Operating Officer, Director, Facebook

Heather, to your first question we think measurements really, really needs to evolve for the world we are in today in many ways. One of those is over emphasizing the last click and the percentages by which this is done are really, very but we think substantially across the industry are over emphasized. But there are also other problems. You know, the current measurement systems don’t work on mobile because they are largely tacky base. They are not accurate. We think they are only 59% accurate and even in the most basic demographic targeting. They don’t go offline to online. .They really works well for one person with one device, usually PC as making online purchases. The world we live in today is that everyone on stone call has multiple devices and people look at ads online and then purchase offline, as well as, you know, deserve more relevant ads and better targeting. So, as we re-launch Adlesse, we think about investing in app tag we are looking to solve all these problems and we think our re-launching is the first step.

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