Facebook's Problem in Two Numbers

Facebook's growth in its most and least-developed markets is not fast enough to justify its still sky-high valuation.

FacebookARPU2.png

12.7 percent

That's the year over year growth in Facebook's average revenue per user in the United States and Canada. It's not the kind of breakneck growth investors expect from technology companies. That's why tech companies have higher P/E ratios than other types of businesses, right? Because investors expect them to generate more money down the line. But perhaps one could make the argument that Facebook's mature in the American market and that we can't expect growth there, even though the company enjoys 50 percent penetration and the world's richest customer base. OK.

15.8 percent

That's the year over year growth in Facebook's average revenue per user in the world outside of North America, Asia, and Europe. If you can't show wild ARPU growth in developing countries and you can't show wild ARPU growth in developed countries, how do you make the argument that you're going to show a ton of revenue growth overall?



Presented by

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

Photos of New York City, in Motion

A filmmaker animated hundreds of still photographs to create this Big Apple flip book

Video

The Absurd Psychology of Restaurant Menus

Would people eat healthier if celery was called "cool celery?"

Video

This Japanese Inn Has Been Open For 1,300 Years

It's one of the oldest family businesses in the world.

Video

What Happens Inside a Dying Mind?

Science cannot fully explain near-death experiences.

More in Business

Just In