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Facebook’s Achilles Heel

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  • Description

    FBN’s Dennis Kneale on the factors that are a concern for investors as Facebook prepares for its IPO.

  • Duration 1:30
  • Date

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Thank you very much all right talk about bad timing all the buzz about -- -- looming IPO suddenly going in a very different direction as a major weakness is revealed.

And it's yeah.

It's.

Hey actually no new concerns about slowing growth and advance of the FaceBook IPO next Friday FaceBook warning that while usage by mobile users is soaring.

Ad revenue for that sector isn't keeping up it's a case of bad news good news let's look at the numbers here the good news is that FaceBook has an almost half a billion monthly mobile users that's up 70%.

In a year and using US India Indonesia Brazil the real drivers of that growth over eighty million use only mobile but the bad news.

Is that in those emerging markets for growth as best ad networks -- weak.

Prices are low FaceBook says not to worry that.

The world's going mobile and those prices are bound to -- key thing though is FaceBook have to get revenue per user up.

Take a look at total revenues almost tripled in two years.

But revenue per user.

As of only 40% in that time I keep in mind how small that number really is in the march quarter FaceBook collected only a dollar and 21 cents per user.

But if it goes public at say 95 billion dollars total market cap -- be a value of a lofty a 105 dollars per user that's going to be a big gap.

For FaceBook to close guys yes something I'm sure.

They gonna be also love about -- man IPO -- thank you Kevin Bacon ham house all is well nothing to say hey nothing I don't know.

Don't worry about that is -- that is thank you are.

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