[gen220]

I don’t think you can make an argument against the present valuation of FB on a historical performance basis.

Investors will tell you that historical performance does not guarantee future performance. It’s one yardstick, but it’s not always the best one.

Facebook’s historical revenue growth was catalyzed by environmental factors that are shifting underneath them.

In 2021, FB would not be allowed to acquire Instagram or WhatsApp. In 2021, Apple (custodians of their most valuable user base) is no longer cooperating with adware.

What does future revenue growth for a Facebook look like, who is not allowed to acquire upstart competitors, who is not allowed to extract maximum value from its mines, and who is facing regulatory scrutiny for past deeds?

Would you be willing to bet that $900B, or $300ish/share on $30 revenue/share have these uncertainties priced-in?

Yahoo! and AOL were dumpster fires in comparison, of course. But I wouldn’t be so certain that FB hasn’t passed its peak valuation, just because it has had a money printing machine for the past decade.

[nl]

Despite all these technology challenges we love to discuss on HN, the truth is that last quarter every single metric except US/Canada daily FB users was up. Daily US/Canada users fell by ~0.5% but this was more than offset by a 1% growth in EU.

Their average revenue per user increased by the largest amount ever (in both absolute and percentage terms) last quarter.

In terms of technology challenges, the iOS changes will reduce FB's ability to target ads. However, it is quite possible this will lead to more revenue for FB because the market structure (ie, domination by FB and Google) means FB maybe able to pass on the loss inefficiency to advertisers.