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The locomotive that drives Facebook ( FB ) is gaining steam from multiple products that will boost revenue growth this year, says an analyst who reiterated a buy rating on the social networking giant. Rosenblatt Securities analyst Martin Pyykkonen issued a research note focused on four Facebook businesses that will likely be a high-priority focus at the company’s large F8 global developer conference to be held in San Francisco in about two weeks. They are its photo- and video-sharing site Instagram, its Messenger and WhatsApp messaging platforms, and the Oculus virtual reality system that began shipping this week. “We see Facebook’s revenue growth visibility being enhanced by Instagram this year, Messenger in 2017, more mass-market virtual reality and maybe WhatsApp by 2018.” Pyykkonen wrote. He says Facebook will achieve ad revenue from Instagram this year of about $1 billion, or 5% of company revenue, as it gains more traction with large brand advertisers. He also expects Facebook, at the F8 conference, to provide more guidance on plans that will lead to monetizing Messenger. Facebook is in position to make its widely popular Messenger platform an all-in-one tool that could include a partnership or a battle with Apple ( AAPL ) and its Apple Pay system. Data from Apple iOS code examined by The Information suggest Facebook could provide users the ability to pay for goods in person. By entering the mobile payments fray, Facebook could either partner or compete with Apple, Android Pay by Alphabet ( GOOGL ), and other services. “We expect the F8 pitch will include Facebook’s Messenger app pushing further into a wide variety of business and consumer services,” Pyykkonen wrote. “We are especially focused on Facebook’s developer direction with mobile payments within the Messenger app.” Facebook began testing ads on Instagram about three years ago. One month ago, Facebook announced it had more than 200,000 advertisers on Instagram. Facebook competes with Apple, Alphabet, Microsoft ( MSFT ), Twitter ( TWTR ) and others in online advertising. He also expects Facebook to expand on plans for its Oculus Rift headset, especially as it relates to attracting a mass-market audience. Oculus began landing in the hands of consumers Monday, as the company received upbeat reports from two other analysts. With his buy rating, Pyykkonen also has a price target of 125. Facebook stock was near 114.50, down a fraction, in midday trading in the stock market today . Facebook is trading comfortably above its 50-day moving average as it works on a new base with a 117.69 buy point. Scalper1 News
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