Foreign exchange fluctuations continue to be the biggest headwind facing major companies doing business abroad. Facebook Inc (NASDAQ:FB) was not spared at all as the effects of a strong dollar came calling with an unprecedented increase in spending raising further questions in the Street. During an interview with CNBC, Sizemore Capital Management CIO, Charles Sizemore, reiterated that the ongoing plans to monetize the platform as well as other products should help shield the company from a further uproar from the Street.
Monetization may be a key aspect of Facebook Inc (NASDAQ:FB) operations going forward but so should attention be paid more on growing user base that continue to generate more value in terms of revenue returns. Increase in ARPU by 42% is an indication of how growth in terms of monthly active users remains a key aspect of the business, according to the analyst.
“Wall Street was not really happy that overall expenses were up by 83%, research and development actually doubled that’s a bit hard to digest. They are building the growth for tomorrow here; it is somewhat questionable this are real expenses today for uncertain pay off tomorrow, but they have been very good at monetizing their assets this far. There is every reason to believe every bit is going to be better going forward,” said Mr. Sizemore.
Monetization of some of the platforms such as WhatsApp, Instagram, and Messenger will be closely watched going forward as the company moves to generate more value from its current user base. The $2 billion acquisition of Oculus Rift that Facebook Inc (NASDAQ:FB) intends to use to spur growth in virtual reality remains a skeptical purchase for Sizemore who believes it won’t amount to anything going forward.
WhatsApp may be growing at an impressive rate in terms of users, but a lack of a monetization strategy may come to haunt the giant social network according to the analyst. Instagram could be key for Facebook Inc (NASDAQ:FB) going forward in terms of revenue returns.
“It is safe to assume that Instagram is making money right now, there are Instagram revenues coming in now. They won’t break them out, they won’t tell us what they are, but that is making money. WhatsApp that is debatable I think WhatsApp us probably losing money for them at this point,” said Mr. Sizemore.
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