Mark Zuckerberg’s Keynote Presentation to Mobile World Congress, 2014, is much more of a discussion with David Kirkpatrick of Techonomy than an actual address to the audience. Anyone making a study of facebook will likely want to carefully consider a couple of points Zuckerberg makes during this discussion.
As I wrote in another recent post to this blog, Zuckerberg’s assertion, during this discussion, of a 200% upside potential for further growth in the size of the community of Internet users, world wide, is heartening. If nothing else, this assertion supports the notion of facebook as a real growth opportunity for investors. Assuming facebook supports approximately 1 billion active users, presently, (for the record, I do not think this figure is credible), once today’s Internet audience expands as Zuckerberg thinks it will, then facebook’s audience will be at 3 billion active users, which would constitute an enormous increase in opportunity for any revenue model.
Eighty percent of the world’s population not connected to the Internet already have high speed network options, but are not using them
But when I listened, once again, to the video recording of this discussion, I noticed an important comment by Zuckerberg: in actuality, 80% of the “disconnected” Internet audience can already connect to the Internet (he mentioned 2G and 3G wireless networks already in place for this potential new audience), but choose not to do so.
So how does Zuckerberg plan on convincing the “disconnected” that paying “a few dollars” for an Internet connection is worth it? Internet.org. So how much cash will it take to make this not-for-profit consortium of several businesses working together to promote Internet usage for emerging markets into the express train it needs to become to ferry the “disconnected” along to a connection? Zuckerberg isn’t sure, but it will certainly take a lot of resources (he mentioned $1 Billion of his own money), with not hope of profit any time soon.
Bottom line: the obstacle impeding the Internet “disconnected” from signing up isn’t a lack of data communications network plant, it’s something else. Therefore, analysts will have to reach their own conclusions as to whether or not Zuckerberg’s argument is plausible.
Any Online Service (WhatsApp included) with 500 million subscribers has got to make some money, some how
When Kirkpatrick asked Zuckerberg to explain why it made sense to buy WhatsApp for $19 Billion, he got an answer in 2 parts. The first part amounted to an argument based on fundamental nature: Zuckerberg alluded to the difficulty of online SaaS offers like WhatsApp achieving a critical mass of 500 million users. Given how difficult it is to reach such a plateau, any SaaS achieving this goal has to make some money, some way or other.
Does Wikipedia make money? Does WhatsApp, as it is currently structured, make money? What about Twitter, or Tumblr. Unfortunately the list of Internet businesses with a lot of audience still struggling to survive is too long to list here. I don’t see the logical necessity of a SaaS like WhatsApp making money any time soon.
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