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DeMatteo Monness Event – Valuing facebook Lou Kerner Presentation, March 20

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Page 1: Kerner Slides - DM Event Facebook Valuation

DeMatteo Monness Event – Valuing facebookLou Kerner Presentation, March 20 2012

Page 2: Kerner Slides - DM Event Facebook Valuation
Page 3: Kerner Slides - DM Event Facebook Valuation

Emergence of The Siloed Internet

Started: September 1993(“Eternal September” –

AOL Connected to The Internet)

1995Amazon Launched

Walmart Entered It’s 50th State

2001Walmart.com launched

Sources: Wikipedia, Walmart

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Emergence of The Social Internet

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Emergence of The Social Internet

Started: September 2006

Facebook Introduced the Newsfeed

Massive User Rebellion

May 2007

Facebook Opens It’s API

Sources: Wikipedia

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Facebook Dominates (Almost) Everywhere

Source: ComScore, Jan. 2012

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500% Growth In Japan Since YE2010

Source: Facebook, March 2012

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Facebook Tracking to 1 Billion Users

Source: iCrossing, Jan. 2012

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Facebook Leads In Engagement Too

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Facebook is Dominating Time Spent

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Zuckerberg’s Law

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The New Media Paradigm

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Leading Facebook Brands

Source: FanPageList, March 2012

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Facebook’s Frictionless SharingIntroduced at f8 Sept., 2011

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Immediate Impact of Frictionless Sharing on Spotify

MAUs

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Long Term Impact of Frictionless Sharing on Spotify MAU’s

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OMGPOP’s Draw Something

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Draw Something Highlights Facebook’s Virality

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eCommerce Sites Born of the Siloed Internet

Source: Internet Retailer, Top 25 eCommerce Sites, 2011

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eCommerce Sites Born Social

Fab.com Threadless Modcloth Etsy0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

23.0%

20.1%

23.1%

20.9%

25.1%

18.3%17.8%

13.5%Google

Facebook

Up

stre

am T

raff

ic G

ener

atio

n

Source: Alexa, March 2012

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Facebook’s Slowing Revenue Growth

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Daily Active User (DAU) Growth Outpacing Ad Growth

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Facebook Q4 ‘11 CPC Increase

Source: Nanigans, January 2012

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Social Network Usage Is Increasingly Mobile

Source: Pandora S-1, Twitter, Facebook, KPCB

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Facebook S-1 Statement

“We had more than 425 million MAUs who used Facebook mobile products in December 2011. We currently do not show ads or directly generate any meaningful revenue from users accessing Facebook through our mobile products, but we believe that we may have potential future monetization opportunities such as the inclusion of sponsored stories in users’ mobile News Feeds.”

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EdgeRank Is Facebook’s PageRank

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Reach Generator Will Be Big

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Facebook Forecast

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Facebook Valuation

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Facebook Risks

• Monetization of mobile• Platform risk – the majority of Fscebook

log ins could happen on an Android device as soon as 2015

• Government intervention around the wrold due to privacy and/or monopoly concerns

• Nothing is constant but change

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Facebook - Additional Upside

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Lou Kerner

@loukerner

[email protected]: Lou Kerner owns shares of Facebook