The Market Ticker
Commentary on The Capital Markets- Category [Earnings]

Before you rush out to play with the bulls in the name post-earnings you might consider this: Basically all of their ad revenue (82%!) is now from mobile.

Mobile is an incredibly difficult proposition over time.  Oh sure, you get away with a lot of ads (and thus money) right up front, but mobile users have a tiny little screen and they pay for the data they consume, sometimes by the byte and always have some sort of cap on it.

Further, there's a huge problem that is coming to the forefront: Granular permissions are now showing up on more and more devices in the Android space; "M" and beyond has it and will continue to.  "Take it or leave it", the former model for Android until Marshmallow was released, is gone forever in the mobile space when it comes to allowing applications to get access to data on your phone and Android is and has been on the vast majority of smartphone handsets.

As customers migrate off Lollipop and earlier Android releases which today are the majority of those handsets the ability to tell Facebook to go to hell on knowing where you are, to have access to your contacts and more becomes very real, very emergent and very relevant to anyone's ability to monetize that tiny little screen.

You're seeing the best it gets right here and now, I suspect, but you have a valuation that imputes indefinitely forward expansion at this rate.

It's not gonna happen and when the desktop ad density collapsed it wasn't slow or steady -- it came all at once and happened in THIS quarter, going from a decent percentage of revenue to an effective zero.

Don't be in the name when that happens on mobile -- because it will.

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