[danielrakh]

" Specifically if ads on mobile are more engaging for consumer and more relevant than desk top ads than the addressable ad market for mobile will be bigger than desktop ad market and the valuations of mobile companies will be greater than desktop all else equal on audience size etc etc. Ie this would be a very positive factor for Snapchat

If Facebook knows this to be true it would result in them being willing to pay higher valuation for mobile companies than other acquirers because google won't know nor will yahoo msft etc because none of them have scale in mobile to understand these powerful secular trends and in essence they under value mobile vs FB and thus under invest and fall farther and farther behind."

Am I the only one who thinks it's a bit naive to assume that Google, Yahoo, and Microsoft..etc don't understand that mobile is dominating desktop because they don't have the mobile scale of FB? It seems like an obvious insight in today's world.

In fact one could argue that Yahoo REALLY understands it considering the shopping spree for mobile first companies these past 2 years.

[jkimmel]

Also it seems a bit odd to suggest Google wouldn't understand mobile advertising value vs desktop.

Google controls the #1 smartphone OS by marketshare and serves mobile ads over Google search products (& GMail now) to a large number of users.

Unless there is an inherently different value for mobile-social ads than just normal mobile/mobile-productivity ads I'm not sure how this would make sense.

[kunle]

I think the point was native mobile advertising (inside the "feed") vs. just mobile advertising (e.g. banners). Facebook doesn't really have a "banners" equivalent, hence, if Facebook is framing mobile as native advertising, and Google is framing mobile as banner advertising, and the growth rates/click through/ROI on each are different, then he's right that they might value mobile materially differently.

[tim333]

> naive to assume that Google, Yahoo, and Microsoft..etc don't understand that mobile is dominating desktop...

That's not the guys point. He's considering whether the mobile ads are more engaging than the desktop ones which is not clear cut. I use my mobile a lot but I can't even recall reading an ad. I'm sure I've scrolled past some. It's possible Facebook has figured how to get people to read the things and have people buy stuff while the other companies have not yet.

[mcintyre1994]

Do you use Facebook at all? Whenever I check my feed on my phone I consistently get a block of advertised apps somewhere in there. They tend to be the typical high grossing IAP ridden games with a summary/call to action install button you can tell is being A/B tested to hell.

[tim333]

Yeah sure I use facebook and there are ads - I just scroll past usually.

[joelrunyon]

> I use my mobile a lot but I can't even recall reading an ad.

This is the same logical fallacy that people try to use to say search ads don't work. CTRs on search are 2-5% so it doesn't matter if you click on it or not - they only need 5 people out of 100 to do so.

For display & mobile, the CTRs are even lower so there should be even more people who say "i never click on an ad." Advertisers will keep spending money anyway.

[BillFranklin]

Moat ad guys know what they're talking about, online ads are about awareness and attention not CTRs https://vimeo.com/120811139

[tim333]

I wasn't saying ads don't work, just that its not clear whether mobile ads or regular ads work better.

[anjc]

Yes. This analysis was amateurish and naive, given the guy's credentials. A 1st year undergrad in business and finance could do a better job with half an hour to spare.

[dang]

"When disagreeing, please reply to the argument instead of calling names."

https://news.ycombinator.com/newsguidelines.html

[prostoalex]

This was never meant to be public and was sent as a reply to a personal email, not like the guy is trying to win a Nobel prize in economics with this analysis.

[choppaface]

It's notable that Evan sent it to Lynton. Perhaps the board was leaning on Evan about something and forwarding this piece was a quick way for Evan to quiet them. I'd have a hard time imaging Evan wasn't any less critical of Noto's rigor than the readers here ...

[threeseed]

Seriously ?

This wasn't some formal document from the office of the CFO. It was a quick, brief analysis between individuals that normally would have never been made public. And we don't know the circumstances that day. He could have been writing this in a car on the way to the airport or a million other scenarios.

It's hilarious people commenting on spelling, grammar and the light detail as though every email they've ever sent is Shakespearan in its quality.

[choppaface]

Sure, I'm speculating, but I think we both agree the email is pretty low quality. I guess it's also possible Evan sent this to Lynton so they could both gag at it ... :)