Comment: Zuckerberg saves face with change of model

THE critics have been lining up to challenge Facebook, claiming that teenagers are deserting it and that it peaked in December 2012. But figures for its last three months of trading suggest there is plenty of life left in the social networking company.

Terry Murden. Picture: Ian Georgeson
Terry Murden. Picture: Ian Georgeson

Ever since the bungled flotation in May of that year, the company and its co-founder Mark Zuckerberg have been targeted by those believing the bubble has burst and that its business model would prove to be flawed.

A 63 per cent surge in revenue in the fourth quarter and profits for the year 30 times higher than a year earlier suggest otherwise. Crucially, the company has answered one of the big questions – how to monetise mobile applications. More than half of its advertising income came from mobile devices, compared to just 23 per cent a year ago. Two years ago it had no revenue at all from mobiles.

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The data questioning Facebook’s model was produced by Princeton University and while some doubted its validity, a second report by GlobalWebIndex found that Facebook traffic has been in decline partly as a result of fashion-conscious young people looking for the next big thing. Some have been switching to new social media apps such as SnapChat and WhatsApp.Those who criticised Facebook, however, may have been right to do so. They forced it to re-examine its business model, in particular to find ways to exploit the shift to mobile devices, and to look more closely at user behaviour so that new features could be introduced.

Investors have bought back into the stock following its bungled flotation in May 2012. The shares took a year to return to their flotation prices but have shown some recent resilience.

Hoteliers ready to cash in on year of events

SCOTLAND’S hotels are in good shape. Occupancy and revenue levels are outperforming those in other parts of the UK. The figures are excellent news for the hospitality sector, more so because 2013 was not a vintage year for events, particularly sporting contests.

By comparison, 2014 is predicted to be Scotland’s year with the Commonwealth Games, Ryder Cup and Homecoming among the big ticket events that will attract unprecedented numbers of visitors. This will also be the first full year of operation for the extended Edinburgh International Conference Centre and the Scottish Hydro, both attracting top shows and business conferences.

The big question must be whether Scotland’s already bulging hotels can cope. Trying to book a room in Glasgow recently over an ordinary weekend proved difficult and there is not exactly a hotel building boom going on at the moment. The Hampton by Hilton in Glasgow city centre is one of the few opening there this year. The big winners, therefore, are likely to be the hoteliers who will find themselves able to charge a handsome price.

Who will buy unwanted bank branches?

BARCLAYS has played down suggestions that it is about to cull its branch network, though the sector is on alert for a decision on just where the axe may fall. Royal Bank of Scotland is expected to follow suit when chief executive Ross McEwan unveils his review next month.

It makes a mockery of those pleas by the likes of Labour leader Ed Miliband for banks to sell branches to create more competition. If the existing banks don’t want them why should anyone else?

Twitter: @TerryMurden1