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Investor Alert

New York Markets Open in:

Futures: /quotes/zigman/43106711/delayed S&P 500 +0.1% /quotes/zigman/48241424/delayed DOW +0.0% /quotes/zigman/43108768/delayed NASDAQ +0.3%

need to know
Moller-Maersk earnings hit by oil, freight falls
Hermès sales up 15% on Asian demand, euro
SoftBank profit falls sharply, misses views
Dollar hovers above 15-month low vs. yen

Disney's ESPN woes undercut 'Star Wars' gain
Apple CEO Cook’s deleted Super Bowl tweet
What to expect from Whole Foods earnings
Japan stocks fall to lowest level since 2014

Asahi bids more than $3.5 bln for Peroni, Grolsch
Heineken lifts dividend as profit rises
Carlsberg reports surprise net profit
Greene King sales rise, cheered by Christmas


Five questions that Janet Yellen must answer
Yellen may say goal is not to slow the economy
Fed: Too white, too male, too many bankers?
Expansion won’t die of old age: S.F. Fed study

IRS says identity thieves breached its systems
How to know if your tax preparer is a crook
Tax software firm warns of data breach
White House's lesson about online security

The sad truth of why retirement
is a myth

Why you should consider retiring abroad

Burberry sues, says J.C. Penney copied its designs

Is it wise to hold onto cash reserves?

Election year could be painful on Wall Street

S.F. real estate looks like it did before dot-com crash
Every major city in the world, in one map

Americans quitting their jobs hit a nine-year high
NFIB survey hints wage gains are fleeting
Job openings are second highest on record

Recipe for less boring Oscar speeches

What to know before buying Beyoncé tickets

How to get mortgage approved: hope for sunny day

99 Cent Gas May Be on Its Way
99-cents-a-gallon gas may be on its way: 24/7 Wall St.

Is the gold rally the real deal or ‘fool’s gold’?
Teen can keep $20,000 gold bar found in lake
Gold one of Wall Street’s best bets early in 2016
Gold futures stretch win streak to five sessions

Why is everyone freaking out about ‘CoCos’?
Convertible bonds are alluring as stocks fall

This stock market has been Europe’s best in 2016
Europe’s battles: migrants, ‘Brexit’ and ECB

Strategists are arguing that stocks need a true purge

A strand of Lennon’s hair is selling for $12,000

White House forecasts best growth in years
Obama proposes $4.1 trillion federal budget
/conga/frontpage.html 367537

Markets »

127.74MDow Volume:
Avg Vol: 130.29M
Unchanged
156
Decliners
4273
Advancers
2073
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 16,014 -13 0.08%
Nasdaq
/quotes/zigman/12633936/realtime 4,269 -15 0.35%
S&P 500
/quotes/zigman/3870025/realtime 1,852 -1 0.07%
GlobalDow
/quotes/zigman/629063/realtime 2,085 +0 0.01%
Gold
/quotes/zigman/33772884/delayed 1,190 -9 0.74%
Oil
/quotes/zigman/2260836/delayed 28.54 +0.60 2.15%
FTSE 100
/quotes/zigman/3173262/delayed 5,624 -8 0.15%
DAX
/quotes/zigman/2380246/delayed 8,902 +22 0.25%
CAC 40
/quotes/zigman/3173214/delayed 4,002 +4 0.10%
FTSE MIB
/quotes/zigman/1482176/delayed 16,036 +123 0.77%
IBEX 35
/quotes/zigman/2759620/delayed 7,968 +40 0.51%
Stoxx 600
/quotes/zigman/2380150/delayed 310 +1 0.19%
Asia Dow
/quotes/zigman/6959860/realtime 2,453 -18 0.72%
Nikkei 225
/quotes/zigman/5986735/delayed 15,713 -372 2.31%
Hang Seng
/quotes/zigman/2622475/delayed 19,288 +105 0.55%
Shanghai
/quotes/zigman/1859015/delayed 2,763 -18 0.63%
Sensex
/quotes/zigman/1652085/delayed 23,668 -353 1.47%
Singapore
/quotes/zigman/1709939/delayed 2,574 -49 1.88%
Euro
/quotes/zigman/16008136/realtime/sampled 1.13 0.00 0.29%
Yen
/quotes/zigman/16008150/realtime/sampled 114.74 -0.38 0.33%
Pound
/quotes/zigman/16008140/realtime/sampled 1.45 +0.00 0.10%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.71 +0.00 0.30%
DXY Index
/quotes/zigman/1652083/delayed 96.02 -0.04 0.04%
WSJ $ Idx
/quotes/zigman/41508961/realtime 89.21 -0.07 0.08%
U.S. 10yr
/quotes/zigman/15866666/realtime 1.74 +0.01 0.78%
German 10y
/quotes/zigman/15866409/realtime 0.25 +0.01 4.45%
Italy 10yr
/quotes/zigman/15866497/realtime 1.64 -0.05 2.78%
Spain 10yr
/quotes/zigman/15866444/realtime 1.71 -0.08 4.50%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.43 +0.02 1.34%
Japan 10yr
/quotes/zigman/15866525/realtime 0.01 +0.03 148.02%
Crude Oil
/quotes/zigman/2260836/delayed 29 +1 2.15%
Gold
/quotes/zigman/33772884/delayed 1,190 -9 0.74%
Corn
/quotes/zigman/25518691/delayed 360 -1 0.21%
DJIA F
/quotes/zigman/48241424/delayed 15,965 +6 0.04%
S&P F
/quotes/zigman/43106711/delayed 1,850 +2 0.11%
Silver
/quotes/zigman/32655632/delayed 15 0 1.45%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 99.54 -0.21 -0.21%
AAPL /quotes/zigman/68270/composite 94.99 -0.02 -0.02%
GOOG /quotes/zigman/59527964/composite 678.11 -4.63 -0.68%
BAC /quotes/zigman/190927/composite 12.20 -0.07 -0.57%
C /quotes/zigman/5065548/composite 37.51 -0.30 -0.79%
F /quotes/zigman/264304/composite 11.35 -0.24 -2.07%
T /quotes/zigman/398198/composite 36.65 -0.46 -1.24%
BP /quotes/zigman/247026/composite 28.95 -0.97 -3.24%
GE /quotes/zigman/227468/composite 28.28 0.11 0.39%
Visit the quote page and your most recently viewed stocks will automatically be displayed here.
Please log in to view your watchlist
MarketWatch Portfolio

World News from MarketWatch

Rates »

5 yr CD
1.3%
2 yr CD
0.7%
1 yr CD
0.5%
MMA $10K+
0.2%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.96% 11.96% 11.62%
Business 13.12% 13.12% 12.85%
Student 13.42% 13.42% 13.14%
Balance Transfer 14.35% 14.35% 14.12%
Airline 15.17% 15.17% 15.10%
Cash Back 15.26% 15.26% 15.27%
Reward 15.28% 15.28% 15.14%
Instant Approval 18.21% 18.21% 18.00%
Bad Credit 22.88% 22.88% 22.73%
Source:CreditCards.com

SPONSORED SECTIONS

Trending Tickers
  • /quotes/zigman/245568/composite DIS+0.22%
  • /quotes/zigman/13139813/composite SCTY-5.69%
  • /quotes/zigman/93928/composite PSEC-7.39%
  • /quotes/zigman/65095/composite PNRA-1.04%
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Our real-time advice on how market shifts and news impact you and your money

3 Reasons Facebook Stock Won’t Soar

——————–

Facebook (FB) on Tuesday tumbled another 8.9% to $31 – well below last week’s $38 initial offering price. Shareholders who had bought the stock for a quick flip must now consider whether to defy all those Facebook skeptics and hold it longer.

That has worked out beautifully for anyone who has held Google (GOOG) stock since its 2004 debut. It has multiplied six-fold in price.

Like Facebook, Google is a purely online business with a dominant market share. It makes most of its money from advertising and turns a high percentage of each revenue dollar into operating profits. Its stock was also initially panned by many as too expensive.

But there are also some important differences between the two companies that may prevent Facebook from producing a Google-like performance over the next eight years. Here are three.

1. Facebook is nearly twice as expensive as Google was following its own stock market debut.

When Google came to market in August 2004, it had booked $2.3 billion in revenues over the prior four quarters. The stock ended its first day of trading at a price that valued Google at $27 billion. Those numbers make for a price-to-revenues ratio of about 12.

Facebook ended Tuesday with a value of $85 billion, and it has brought in $4 billion in revenues over the past four quarters. That’s a price-to-revenues ratio of 21.

Google has found a way to multiply its revenues 17 times since its initial stock offering, to $40 billion. If Facebook can do likewise, investors should expect its stock to do half as well, considering that it’s starting at nearly twice the price. That would nonetheless provide a handsome return for investors. But it may be unrealistic to expect that kind of revenue growth from Facebook.

2. Google has already plucked the low-hanging fruit.

Back in 2004, newspapers and magazines together captured 43.8% of advertising spending, versus just 3.7% for websites, according to Zenith Optimedia. That gap has narrowed. This year, 27.3% of advertising dollars are expected to go to newspapers and magazines, and 18.2% is expected to go to websites.

The shift from print to online advertising will continue, but not as quickly. In 2014, newspapers and magazines will collect 24.1% of advertising dollars, versus 22.1% for websites, predicts Zenith Optimedia.

In other words, Google thrived in part by capturing business from vulnerable print publications, but the weakest of these have closed, and others have built thriving websites. Facebook will have to compete for ad dollars with a stronger core of print companies and their websites, and more important, with the likes of Google.

3. The world only needs so much advertising.

Suppose Facebook grows much more skilled in turning its traffic into advertising dollars. Couldn’t it then multiply its revenues 17 times over the next eight years, the way Google has over the past eight? After all, the company’s active user base consists of 13% of humanity.

There’s a problem with that thinking, however. Google’s rise didn’t prevent print media companies from selling ads. Rather, it cratered the prices for such ads. For example, Google’s AdSense allowed just about any website owner to sell advertising by banding together with a massive jumble of other websites. The result was a flood of new pages available for ads, creating more supply than demand.

For a company of Facebook’s size, that presents a dilemma. If it doesn’t learn how to effectively sell ads against its massive traffic, its revenues won’t grow quickly, but if it does learn, the result may be a glut of ad-space supply and a drop in prices, restraining revenue growth just the same.

Global advertising spending is expected to increase 4.8% this year, according to Zenith Optimedia. Facebook’s revenues, meanwhile, are projected by analysts to increase 36% this year to $5.1 billion. That’s fast growth and it suggests Facebook is indeed taking market share, but it’s early in the company’s publicly traded life. For the stock to pay off over the long term, Facebook will have to continue to outgrow the advertising industry by a similar margin for many years to come.

Google has done it. But then, in its first year as a public company, its revenues didn’t rise a mere 36%. They more than doubled.

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    • By WebOsPublisher

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    • It only seems natural that the eyes and brain will evolve not to pay attention to advertisements.
      When I click on a video and have to wait for an ad, I just do something else for 15 or 30 seconds. Honestly, I’m starting to just ignore all types of ads subconsciously. I can’t be the only one.

      I’m not sure if I would rely on any company that survives just off cheap advertisement that aren’t very effective.

      Here is a test – There is a big ad space on the top right of this site. Do you remember what it was ? Exactly!

    • and you can block the ads which is great.

    • Very good reasons, but there is more: DEFLATION! Deflationary crash is coming. An entire nation cannot borrow non-stop and hope that all will be fine when the pay back time arrives. US dollar is the place to be. There is nowhere to hide. There is no way to diversify. Every asset will decline against the US dollar.Google for “DEFLATIONARY CRASH KONDRATIEFF WAVE” to understand the dangers in this deflationary environment. FED printed trillions! More than tripled the base money supply. Where is the inflation? Does that tell you something?

      http://www.kondratieffwavecycle.com

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MarketWatch - Stock Market Quotes, Business News, Financial News
Bulletin
Investor Alert

New York Markets Open in:

Futures: /quotes/zigman/43106711/delayed S&P 500 +0.1% /quotes/zigman/48241424/delayed DOW +0.0% /quotes/zigman/43108768/delayed NASDAQ +0.2%

need to know
Moller-Maersk earnings hit by oil, freight falls
Hermès sales up 15% on Asian demand, euro
SoftBank profit falls sharply, misses views
Dollar hovers above 15-month low vs. yen

Disney's ESPN woes undercut 'Star Wars' gain
Apple CEO Cook’s deleted Super Bowl tweet
What to expect from Whole Foods earnings
Japan stocks fall to lowest level since 2014

Asahi bids more than $3.5 bln for Peroni, Grolsch
Heineken lifts dividend as profit rises
Carlsberg reports surprise net profit
Greene King sales rise, cheered by Christmas


Five questions that Janet Yellen must answer
Yellen may say goal is not to slow the economy
Fed: Too white, too male, too many bankers?
Expansion won’t die of old age: S.F. Fed study

IRS says identity thieves breached its systems
How to know if your tax preparer is a crook
Tax software firm warns of data breach
White House's lesson about online security

The sad truth of why retirement
is a myth

Why you should consider retiring abroad

Burberry sues, says J.C. Penney copied its designs

Is it wise to hold onto cash reserves?

Election year could be painful on Wall Street

S.F. real estate looks like it did before dot-com crash
Every major city in the world, in one map

Americans quitting their jobs hit a nine-year high
NFIB survey hints wage gains are fleeting
Job openings are second highest on record

Recipe for less boring Oscar speeches

What to know before buying Beyoncé tickets

How to get mortgage approved: hope for sunny day

99 Cent Gas May Be on Its Way
99-cents-a-gallon gas may be on its way: 24/7 Wall St.

Is the gold rally the real deal or ‘fool’s gold’?
Teen can keep $20,000 gold bar found in lake
Gold one of Wall Street’s best bets early in 2016
Gold futures stretch win streak to five sessions

Why is everyone freaking out about ‘CoCos’?
Convertible bonds are alluring as stocks fall

This stock market has been Europe’s best in 2016
Europe’s battles: migrants, ‘Brexit’ and ECB

Strategists are arguing that stocks need a true purge

A strand of Lennon’s hair is selling for $12,000

White House forecasts best growth in years
Obama proposes $4.1 trillion federal budget
/conga/frontpage.html 367537

Markets »

127.74MDow Volume:
Avg Vol: 130.29M
Unchanged
156
Decliners
4273
Advancers
2073
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 16,014 -13 0.08%
Nasdaq
/quotes/zigman/12633936/realtime 4,269 -15 0.35%
S&P 500
/quotes/zigman/3870025/realtime 1,852 -1 0.07%
GlobalDow
/quotes/zigman/629063/realtime 2,085 +0 0.01%
Gold
/quotes/zigman/33772884/delayed 1,190 -9 0.74%
Oil
/quotes/zigman/2260836/delayed 28.54 +0.60 2.15%
FTSE 100
/quotes/zigman/3173262/delayed 5,623 -9 0.16%
DAX
/quotes/zigman/2380246/delayed 8,902 +22 0.25%
CAC 40
/quotes/zigman/3173214/delayed 4,002 +4 0.10%
FTSE MIB
/quotes/zigman/1482176/delayed 16,035 +122 0.77%
IBEX 35
/quotes/zigman/2759620/delayed 7,968 +40 0.51%
Stoxx 600
/quotes/zigman/2380150/delayed 310 +1 0.17%
Asia Dow
/quotes/zigman/6959860/realtime 2,453 -18 0.72%
Nikkei 225
/quotes/zigman/5986735/delayed 15,713 -372 2.31%
Hang Seng
/quotes/zigman/2622475/delayed 19,288 +105 0.55%
Shanghai
/quotes/zigman/1859015/delayed 2,763 -18 0.63%
Sensex
/quotes/zigman/1652085/delayed 23,668 -353 1.47%
Singapore
/quotes/zigman/1709939/delayed 2,573 -51 1.93%
Euro
/quotes/zigman/16008136/realtime/sampled 1.13 0.00 0.29%
Yen
/quotes/zigman/16008150/realtime/sampled 114.74 -0.38 0.33%
Pound
/quotes/zigman/16008140/realtime/sampled 1.45 +0.00 0.10%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.71 +0.00 0.30%
DXY Index
/quotes/zigman/1652083/delayed 96.02 -0.04 0.04%
WSJ $ Idx
/quotes/zigman/41508961/realtime 89.21 -0.07 0.08%
U.S. 10yr
/quotes/zigman/15866666/realtime 1.74 +0.01 0.78%
German 10y
/quotes/zigman/15866409/realtime 0.25 +0.01 4.74%
Italy 10yr
/quotes/zigman/15866497/realtime 1.64 -0.05 2.78%
Spain 10yr
/quotes/zigman/15866444/realtime 1.71 -0.08 4.50%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.43 +0.02 1.34%
Japan 10yr
/quotes/zigman/15866525/realtime 0.01 +0.03 148.02%
Crude Oil
/quotes/zigman/2260836/delayed 29 +1 2.15%
Gold
/quotes/zigman/33772884/delayed 1,190 -9 0.74%
Corn
/quotes/zigman/25518691/delayed 360 -1 0.21%
DJIA F
/quotes/zigman/48241424/delayed 15,965 +6 0.04%
S&P F
/quotes/zigman/43106711/delayed 1,850 +2 0.11%
Silver
/quotes/zigman/32655632/delayed 15 0 1.45%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 99.54 -0.21 -0.21%
AAPL /quotes/zigman/68270/composite 94.99 -0.02 -0.02%
GOOG /quotes/zigman/59527964/composite 678.11 -4.63 -0.68%
BAC /quotes/zigman/190927/composite 12.20 -0.07 -0.57%
C /quotes/zigman/5065548/composite 37.51 -0.30 -0.79%
F /quotes/zigman/264304/composite 11.35 -0.24 -2.07%
T /quotes/zigman/398198/composite 36.65 -0.46 -1.24%
BP /quotes/zigman/247026/composite 28.95 -0.97 -3.24%
GE /quotes/zigman/227468/composite 28.28 0.11 0.39%
Visit the quote page and your most recently viewed stocks will automatically be displayed here.
Please log in to view your watchlist
MarketWatch Portfolio

World News from MarketWatch

Rates »

5 yr CD
1.3%
2 yr CD
0.7%
1 yr CD
0.5%
MMA $10K+
0.2%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.96% 11.96% 11.62%
Business 13.12% 13.12% 12.85%
Student 13.42% 13.42% 13.14%
Balance Transfer 14.35% 14.35% 14.12%
Airline 15.17% 15.17% 15.10%
Cash Back 15.26% 15.26% 15.27%
Reward 15.28% 15.28% 15.14%
Instant Approval 18.21% 18.21% 18.00%
Bad Credit 22.88% 22.88% 22.73%
Source:CreditCards.com

SPONSORED SECTIONS

Trending Tickers
  • /quotes/zigman/245568/composite DIS+0.22%
  • /quotes/zigman/13139813/composite SCTY-5.69%
  • /quotes/zigman/93928/composite PSEC-7.39%
  • /quotes/zigman/65095/composite PNRA-1.04%
  • /quotes/zigman/207002/composite DB-1.03%
X
Powered by StockTwits
Link to MarketWatch's Slice.

As of July 2, 2013, the SmartMoney content you loved now lives on MarketWatch.

MarketWatch will continue to provide the same important news and information you rely on every day. And, as a MarketWatch user, you will be able to enjoy:

  • Personalized news and quote email alerts
  • Editorial e-newsletters about personal finance, mutual funds and market-specific coverage
  • Premium newsletters by our market experts
  • Games, such as Virtual Stock Exchange and Beat the Darts
  • Free WSJ.com registration