After an “astonishing” annual revenue growth of 50.8% reported in Q4 of 2016, Facebook remains one of the web’s biggest growing companies, with revenue growth outpacing the likes of Amazon by nearly 30%.
The potential for Facebook to keep making money is in digital advertising with increasing numbers of advertisers seeing the benefits of connecting with consumers directly through their laptops or smartphones, rather than through the struggling medium of print.
Stuart O’Gorman, director of technology equities at Henderson Global Investors, believes advertising platforms are changing fast and that sites such as Facebook provide advertisers with a different way of accessing an audience.
He said: “There is still a huge amount of advertising and a huge amount of television watched, but we think this is changing and it is changing fast. For example, YouTube, Netflix and Facebook enable customers to view media differently.
“We think advertising budgets are at the very early stages of another big shift; the first was from print to the internet, the second is going to be from television to the internet.”
Morningstar technology stock analyst Brian Calello agrees, listing both Facebook and Google as the two companies that will benefit most from a boom in online ad revenue, making them a good buy for 2017.