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The advertising network which Facebook ( FB ) announced two years ago is gaining on a similar platform from Alphabet ( GOOGL ), which is one reason an analyst increased his stock price target on the social networking giant Thursday. The ad platform, called Facebook Audience Network (FAN), uses Facebook data to help advertisers place ads across multiple websites, beyond Facebook. FAN is in direct competition with AdSense and AdMob from Alphabet. Nomura analyst Anthony DiClemente raised his price target on Facebook to 135 from 125, saying Facebook’s expansion of FAN and the upcoming monetization of its Messenger platform will help it maintain strong revenue growth. Facebook stock ended down 0.3%, just below 110, in the stock market today . Facebook stock hit an all-time high of 117.59 on Feb. 2. Alphabet stock eased below 732, down about 1%. Alphabet hit an all-time high of 810.35, also on Feb. 2. DiClemente estimates FAN will add $2 billion to Facebook revenue in 2016, more than double that of 2015. While Google AdSense and AdMob will pull in about $7.6 billion in revenue in 2016, FAN’s revenue is growing at a much faster rate, DiClemente estimates. In addition to FAN, Facebook is in the early stages of monetizing Messenger, its free instant-messaging platform with more than 800 million users. Media reports indicate Facebook will enable companies to message ads to customers via Messenger starting in Q2 2016. DiClemente estimates Facebook Messenger could approach $300 million in annual revenue. The emerging growth drivers of FAN and Messenger will compliment the strong revenue growth Facebook is getting from Instagram and video ads. “Looking at the drivers of 2016 revenue, core ad growth and Instagram should be the largest drivers of absolute dollar growth,” DiClemente wrote in the report. He estimates Instagram, the photo- and video-sharing website, will contribute about $2.5 billion in 2016 revenue. Scalper1 News
Scalper1 News