Facebook Inc(NASDAQ:FB) unlocks its fortunes with video ads

Posted On 12 Aug 2013

Denver, CO, 08/12/2013 (Avauncer.com) – Shares of Facebook Inc (NASDAQ:FB) were down 0.10% to close at $38.50. Despite this, shares remained at the upper end of its 52-week price range of $17.55 to $39.32. However, shares remained moderately traded with 43.62 million shares being traded, up from the average volume of 67.08 million shares.

The company is expected to generate substantial revenue from its upcoming project of releasing video ads on its website. This is because of two prime reasons. First is the fact that the user base which the social networking site has forms the largest part of the population demographic. Facebook users have their age 18 to 35, as a result of which such ads can reach out to a larger part of the population. Also, as a result, a larger part of goods are targeted to this sector, especially the convenience that this group finds with online purchase. Next is the timing at which such Facebook ads will be able to reach its target group. As users have access to FB during the daytime, the company can very well tap this time to display ads. This is not possible with ads as many viewers do not have access to television during the daytime.

Further, the company can very well resort to duplication of same ads in primetime, which can not only create additional revenue for the company, but also prove to be meaningful and having a longer impact. The company is also reported to have an excellent quarter, with momentum which was generated by the company in second quarter to have flowed into third quarter as well. Advertisers have also responded positively to company’s introduction of video advertising initiative.

The company is also said to have a bright future, which still stands under monetized, despite being the largest social networking site for quite some time. It is said that social networking sites generate more revenue per user than Yahoo! Inc. (NASDAQ:YHOO) or AOL Inc. (NYSE:AOL).

This has posed a great challenge for TV advertising market.

About the Author

Neha Gupta has completed her CFA Level 2 and has also her PGDBA, and has good analytical abilities. Getting into the intricacies of the stock information, delving into the company’s financial statements is my passion and have a great deal of understanding of Economy their impact on the Market and individual stocks.