Produced byMobile the game changerSmartphone trends benefitting commerce;Advertising models emergingJames Lee/646-596-2409...
Global Internet and Media universe Se gm ent                                                                        Global...
Global smartphone trends   North America smartphone user forecast                                                         ...
Mobile: Benefiting commerce    Amazon PriceCheck app saves shopper money by offering competitive prices    PayPal check-in...
Mobile: Driving convergence  Web-influenced retail sales (USA)                                            Value of smartph...
Mobile: Driving convergence   Google product search (old)                                       Google product search (new...
Mobile commerce: Ready to take off!  % of smartphone users shop and pay with phones:                                      ...
Ecommerce: Strong secular growth  Global ecommerce opportunities                                                          ...
Ecommerce: Asia key to growth     China ecommerce market size                                                             ...
Social: Taking over the Internet                                                                                         M...
Mobile: Work-in-progress for advertising          Mobile search hitting an inflection point Google mobile search CPC as % ...
Future of Advertising: Advertising Week NYC                     Mobile time spent 10% to 30%                              ...
Future of Advertising: Advertising Week NYC              Consumers straddle among screens                              Con...
Global top picks        Google: Bottoming of CPC will accelerate growth       Paid clicks and CPC YoY growth trend by quar...
Global top picks        eBay: Driving retailers online and mobile                                     Sensitivity analysis...
Facebook: Seeking monetization©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures ...
Social the best targeting platform                                                                                 Faceboo...
Organic media on Facebook                                                Facebook fan growth                              ...
Why targeting fans on FB     CTR comparison between fan and general audience                                  Facebook: Re...
Paid media on Facebook                        Faceboook advertising model                  Comparison between search adver...
Performance metrics      Metrics used worldwide to measure the value                                                   Ad ...
Leveraging engaging mobile users    N.A MAU vs International MAU                                                          ...
Expanding product portfolio   Sponsored stories amplify the social graph coverage               Promoted posts amplify the...
FB performance by ad placement         Mobile newsfeed ads generate higher CTR,                                           ...
FB performance by ad format                FB CTR by ad format (Spruce Media)                                             ...
Market opportunities                        Facebook addressable market                                                   ...
New monetization opportunities    Facebook app center (on iPhone): Game recommendations                          Facebook-...
Financial outlook              Facebook revenue forecast by segment                                                 Facebo...
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
CLSA Global Media Presentation
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CLSA Global Media Presentation

  1. 1. Produced byMobile the game changerSmartphone trends benefitting commerce;Advertising models emergingJames Lee/646-596-2409/james.lee@clsa.comWei Fang/617-295-0128/wei.fang@clsa.comGlobal Internet and Media ResearchNovember, 2012The group of companies that comprise CLSA are affiliates of Credit Agricole Securities (USA) Inc.For important disclosure information please refer to the last page of this presentation.
  2. 2. Global Internet and Media universe Se gm ent Global Em erging Marke ts Com pany GOOG FB* YHOO AM ZN EBAY LNKD EXPE* PCLN GRPN ZNGA BIDU SINA* SOHU FM CN* CTRP Te nce nt** YNDX M AIL.ru Price 665.90 20.07 17.51 226.47 47.47 99.00 57.61 633.43 2.69 2.10 104.60 54.09 40.28 24.95 20.16 271.60 21.30 32.06 Shares (F/D) 333.0 2,579.0 1,195.0 460.0 1,314.0 112.3 138.2 51.2 528.4 730.5 349.8 66.8 38.3 133.1 146.8 1,861.9 335.0 208.3 Market Cap 221,745 51,761 20,924 104,176 62,376 11,118 7,961 32,448 1,421 1,534 36,589 3,613 1,543 3,321 2,959 505,692 7,136 6,678 Net Debt (39,518) (9,650) (6,427) (5,248) (4,617) (617) (1,144) (2,562) (1,123) (1,217) (2,511) (714) (787) (443) (645) (29,483) (350) (118) Enterprise Value 182,227 42,111 14,497 98,928 57,759 10,501 6,817 29,886 299 317 34,078 2,899 756 2,878 2,314 476,209 6,786 6,560 Net Cash per Share 118.67 3.74 5.38 11.41 3.51 5.49 8.28 50.01 2.13 1.67 7.18 10.69 20.55 3.33 4.39 15.83 1.04 0.57 Es tim ates Revenue 11CL 29,097 3,711 4,381 48,077 11,652 522 3,449 4,356 1,625 1,156 2,304 478 852 793 556 35,163 622 515 Revenue 12CL 41,438 5,033 4,477 61,579 14,048 948 3,982 5,247 2,340 1,098 3,541 529 1,052 979 664 53,064 919 673 Revenue 13CL 51,693 6,760 4,912 77,494 16,447 1,436 4,526 6,273 2,786 1,049 4,815 655 1,239 1,182 791 68,342 1,220 850 Grow th 11-12 42% 36% 2% 28% 21% 81% 15% 20% 44% -5% 54% 11% 23% 23% 19% 51% 48% 31% Grow th 11-13 33% 35% 6% 27% 19% 66% 15% 20% 31% -5% 45% 17% 21% 22% 19% 39% 40% 28% EBITDA 11CL 16,067 2,303 1,652 2,502 4,626 99 711 1,511 (112) 303 1,331 50 313 367 217 16,934 288 263 EBITDA 12CL 18,872 2,804 1,480 3,516 5,516 201 796 1,950 286 159 2,011 17 279 401 144 22,608 416 346 EBITDA 13CL 22,762 3,721 1,677 5,086 6,282 341 927 2,406 277 125 2,633 86 334 490 163 28,616 551 436 Grow th 11-12 17% 22% -10% 41% 19% 103% 12% 29% nm -48% 51% -67% -11% 9% -34% 34% 44% 32% Grow th 11-13 19% 27% 1% 43% 17% 86% 14% 26% nm -36% 41% 31% 3% 16% -13% 30% 38% 29% GAAP EPS 11CL 29.76 0.52 0.82 1.35 2.46 0.11 2.75 20.62 (0.97) (1.40) 2.98 0.93 3.93 2.03 1.12 6.77 0.57 0.99 GAAP EPS 12CL 31.35 0.52 3.25 0.08 1.99 0.08 2.49 26.53 0.00 (0.31) 4.75 0.12 2.07 1.84 0.68 8.72 0.79 1.20 GAAP EPS 13CL 38.77 0.66 0.89 2.68 2.26 0.50 3.15 32.68 0.03 (0.21) 6.49 0.87 3.03 2.28 0.85 10.98 1.03 1.52 Grow th 11-12 5% 0% 296% -94% -19% -27% -9% 29% -100% -78% 59% -87% -47% -9% -39% 29% 39% 21% Grow th 11-13 14% 13% 4% 41% -4% 113% 7% 26% nm nm 48% -3% -12% 6% -13% 27% 34% 24% Operating M argin 2011CL 38% 53% 18% 4% 28% 11% 17% 34% -7% 18% 52% 7% 33% 41% 30% 43% 36% 39% 2012CL 31% 43% 13% 3% 27% 13% 16% 36% 5% 14% 51% 1% 20% 39% 15% 37% 35% 30% 2013CL 30% 44% 15% 4% 28% 15% 14% 37% 8% -9% 51% 7% 23% 38% 14% 38% 36% 29% Valuation EV/Sales 2011 6.3 11.3 3.3 2.1 5.0 20.1 2.0 6.9 0.2 0.3 14.8 6.1 0.9 3.6 4.2 13.5 10.9 12.7 EV/Sales 2012 4.4 8.4 3.2 1.6 4.1 11.1 1.7 5.7 0.1 0.3 9.6 5.5 0.7 2.9 3.5 9.0 7.4 9.7 EV/Sales 2013 3.5 6.2 3.0 1.3 3.5 7.3 1.5 4.8 0.1 0.3 7.1 4.4 0.6 2.4 2.9 7.0 5.6 7.7 EV/EBITDA 2011 11.3 18.3 8.8 39.5 12.5 106.4 9.6 19.8 nm 1.0 25.6 58.0 2.4 7.9 10.7 28.1 23.6 24.9 EV/EBITDA 2012 9.7 15.0 9.8 28.1 10.5 52.3 8.6 15.3 1.0 2.0 16.9 175.7 2.7 7.2 16.1 21.1 16.3 19.0 EV/EBITDA 2013 8.0 11.3 8.6 19.5 9.2 30.8 7.4 12.4 1.1 2.5 12.9 33.7 2.3 5.9 14.2 16.6 12.3 15.0 P/E 2011 22.4 38.6 21.4 167.8 19.3 900.0 20.9 30.7 nm nm 35.1 58.2 10.2 12.3 18.0 40.1 37.4 32.4 P/E 2012 21.2 38.6 5.4 2,830.9 23.9 nm 23.1 23.9 nm nm 22.0 450.8 19.5 13.6 29.6 31.1 27.0 26.7 P/E 2013 17.2 30.4 19.7 84.5 21.0 198.0 18.3 19.4 89.7 nm 16.1 62.2 13.3 10.9 23.7 24.7 20.7 21.1 Cash-adj.P/E 2011 18.4 31.4 14.8 159.3 17.9 850.1 17.9 28.3 nm (0.3) 32.7 46.7 5.0 10.6 14.1 37.8 35.5 31.8 Cash-adj.P/E 2012 17.5 31.4 3.7 2,688.3 22.1 nm 19.8 22.0 nm nm 20.5 361.7 9.5 11.7 23.2 29.3 25.6 26.2 Cash-adj.P/E 2013 14.1 24.7 13.6 80.2 19.4 187.0 15.7 17.9 18.8 nm 15.0 49.9 6.5 9.5 18.5 23.3 19.7 20.7Except for GOOG, FB, YHOO, AMZN, EBAY and FMCN, all estimated are First Call consensus. ¹ EPS on pro forma basis ² in HK$. Priced as of November 12, 2012.Source: First Call, Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 2 Produced by
  3. 3. Global smartphone trends North America smartphone user forecast Global smartphone user forecast 350 100% 2,500 60% (M) Smartphone users Smartphone penetration (M) Smartphone users Smartphone penetration 300 80% 2,000 250 40% 60% 1,500 200 150 40% 1,000 20% 100 20% 500 50 0 0% 0 0% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 % of consumers who use smartphone in stores Reasons for using smartphones in stores (USA) 100 (%) 70 (%) 60 50 80 40 30 60 20 10 40 0 20 n u d o c s C h o e k t o a c i r f f w R d a e v o a k m L r t i p o e v 0 c t m i n o a e c s C u r u d p d p p o o t e v o e a v e s c s c s c i l / / r r r t M t h n d a e US France Japan UK Germany F i i s i m h u p r a e k t s c C i h b r a e y v k C c u p o a e t s r l i t f©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 3 Produced by
  4. 4. Mobile: Benefiting commerce Amazon PriceCheck app saves shopper money by offering competitive prices PayPal check-in helps merchant improve customer service and reduce risk of fraud transactionsSource: eMarketer, comScore, iReseach©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 4 Produced by
  5. 5. Mobile: Driving convergence Web-influenced retail sales (USA) Value of smartphones in driving traffic to retail stores worldwide 4,000 (US$bn) Non web-influenced retail sales 3,500 Web-influenced retail sales Lot of value Some value No value 3,000 2,500 2011 2,000 1,500 43% 1,000 36% 500 2010 0 2010 2011 2012 2013 2014 0% 20% 40% 60% 80% 100% How eBay Now works Source: eMarketer, Google, Forrester Research, RSR©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 5 Produced by
  6. 6. Mobile: Driving convergence Google product search (old) Google product search (new) Google improving Product search • Google helping small retailers moving online. • Dedicated space for discovery. • Created trust stores program. • Help SMB retailers even the playing field with larger retailers or ecommerce providers Source: eMarketer, Google, Forrester Research, RSR©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 6 Produced by
  7. 7. Mobile commerce: Ready to take off! % of smartphone users shop and pay with phones: Global mobile payment volume (2010) strong adoption 50 (%) 40 Global credit card transaction volume = $5tn 30 20 10 Global mobile payment volume = $180bn, about 4% of total market 0 Japan US UK Germany France Mobile payment volume by region: International is key Mobile Payment opportunities • Online Payment as a % of offline still tiny Latin America • Mobile payment just stared Asia-Pacific 1% 22% • PayPal is leading the way; $10B TPV targeted for 2012 North America 35% EMEA 41%©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 7 Produced by
  8. 8. Ecommerce: Strong secular growth Global ecommerce opportunities Global ecommerce sales by country 1,500 (US$bn) 600 570 (US$bn) 1,192 500 1,107 976 1,000 400 837 693 300 570 500 200 176 81 68 100 19 0 0 2010 2011 2012 2013 2014 2015 Global US Japan China Korea Global ecommerce to retail penetration by country Key Points: 15 (%) • Global ecommerce will 2x in a few years. • Global penetration low at 6%. 10 • USA is the largest market. • Asia-Pacific expects to have highest growth, 5 driven by China at 3% penetration. • Cross-border trades an important part; eBay dominating 0 Global US Japan China Korea Source: Forrester Research, iResearch, CLSA Asia-Pacific Markets, Credit Agricole Securities (USA) ©2012 Credit Agricole Securities (USA) Inc. IMPORTANT: Please refer to important disclosures on the last page. Page 8 Produced by
  9. 9. Ecommerce: Asia key to growth China ecommerce market size Japan/Korea ecommerce forecasts 350 (US$bn) 294 Japan China Korea 300 600% 250 226 500% 200 Set 2010 as index 165 400% base of 100% 150 117 300% 100 200% 68 50 100% 0 0% 2010 2011E 2012E 2013E 2014E 2010 2011 2012 2013 2014 2015 Ecommerce market size China vs. USA Key Points: 350 (US$bn) • Expect China ecommerce to grow at 44% CAGR China US 294 300 259 • Japan is expect to grow 17% CAGR and Korea is 250 expected to grow 12% CAGR. 200 176 • Expect China will be large than US by 2014. 150 • Asia a strategic market for global players 100 • Japan a top overseas market for Amazon. 68 50 • Korea a top overseas market for eBay. 0 • China a growing market for AMZN. 2010 2014E Source: Forrester Research, iResearch, Credit Agricole Securities (USA) ©2012 Credit Agricole Securities (USA) Inc. IMPORTANT: Please refer to important disclosures on the last page. Page 9 Produced by
  10. 10. Social: Taking over the Internet Monthly time spent on key internet Global social-networking-users penetration 3,000 (m) categories SNS users Social networking Search/Navigation 2,500 20 (Hours in bn) Retail Communication 2,000 Other content 15 1,500 10 1,000 5 500 0 0 2007 2008 2009 2010 2011 2011 2012 2013 2014 2015 2016 Facebook users as % of global internet users Facebook user penetration (2011) 50 (%) 40 70% 60% 30 50% 40% 20 30% 20% 10 10% 0% 0 Global US/Canada Europe ROW Asia 2011 2012 2013 2014 2015 2016 Source:eMarketer, comScore©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 10 Produced by
  11. 11. Mobile: Work-in-progress for advertising Mobile search hitting an inflection point Google mobile search CPC as % of PC search CPC Google mobile search clicks as % of PC search clicks 80% 50% 40% 60% 30% 20% 40% 10% 20% 0% 1 u 1 u O O M M J J A A D D 2 1 2 1 n n 1 1 1 M M n u 1 2 1 M M n u 2 1 a a p p N N 2 1 2 1 b S b S e A e 2 1 A c 2 1 1 F c 1 1 F 1 l p l a p 1 a u e 1 1 u g e e 1 g J J e o J o J v v 1 2 1 1 2 1 r c r c t t a a a a y y y y r rGoogle mobile search clicks breakdown by devices Google mobile search CPC (Desktop as index 100%) 100% 80% Tablets 60% 35% 40% Smartphones 65% 20% 0% Desktop Tablets Smartphones©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 11 Produced by
  12. 12. Future of Advertising: Advertising Week NYC Mobile time spent 10% to 30% Increasing mobile usage on major platforms 45% 70% Time spent Ad spent 40% 60% 35% estimated 50% 30% app usage 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% TV Internet Radio Mobile Newspapers Magazines Twitter Facebook Google Search: Mobile CTR 2.5x higher Facebook: Mobile CTR 8x higher 1.0% 6% 0.8% 4% 0.6% 0.4% 2% 0.2% 0.0% 0% Mobile Computer Mobile Computer©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 12 Produced by
  13. 13. Future of Advertising: Advertising Week NYC Consumers straddle among screens Consumers like to multi-task The quest for Holy Trinity Identity and reach help advertisers deliver advertising as a “personal service”©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 13 Produced by
  14. 14. Global top picks Google: Bottoming of CPC will accelerate growth Paid clicks and CPC YoY growth trend by quarter Google CTR by device 50% Paid clicks CPC 6.0% 40% 5.0% 30% 4.0% 20% 10% 3.0% 0% 2.0% -10% 1.0% -20% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 0.0% Smartphones Tablets Computers Facebook: Mobile monetization improving Facebook CTR by ad format Facebook CPC by ad format 10 100 100 92 88 8.0 8 80 6 60 4 3.3 40 2 20 1.0 0 0 Desktop right-rail Desktop newsfeed Mobile newsfeed Desktop right-rail Desktop newsfeed Mobile newsfeed©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 14 Produced by
  15. 15. Global top picks eBay: Driving retailers online and mobile Sensitivity analysis of incremental revenues from offline retail business Focus Media: Driving growth from urbanization (population vs. spending) China urban ad spending distribution China urban population distribution 80% 100% 91% 60% 60% 80% 40% 60% 40% 40% 20% 20% 9% 0% 0% Tier 1 Tier 2 + Tier 1 Tier 2 +©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 15 Produced by
  16. 16. Facebook: Seeking monetization©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 16 Produced by
  17. 17. Social the best targeting platform Facebook achieves both targeting and Facebook = social and interest connections reach Targeting Facebook social advertising Traditional display advertising Reach Social change media landscape prior to and post Social drives demand generation social media Demand generation Awareness Social Consideration Demand fulfillment Favorability Search Purchase intent Source: Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 17 Produced by
  18. 18. Organic media on Facebook Facebook fan growth EdgeRank algorithm300% (%) Index fans base in Oct 2010 as 100% Affinity200% (interaction rating with viewer)100% Object Engagement Time decay 0% (comments, likes (age of post) Dec 11 Nov 10 Dec 10 Feb 11 Mar 11 May 11 Jun 11 Aug 11 Sep 11 Oct 11 Nov 11 Oct 10 Jan 11 Apr 11 Jan 12 Feb 12 Jul 11 & shares) Performance of posts by size of fan base Performance case (Microsoft, 3.1m fans) Source: Efficient Frontier, Webtrends©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 18 Produced by
  19. 19. Why targeting fans on FB CTR comparison between fan and general audience Facebook: Reach of fans and general audience 350 No. of friends each group of 8 General audience users have on Facebook 300 Fan 6 250 200 4 150 100 2 50 0 0 CTR Clicks on ads General audience Fan Facebook fan characteristics Spending on social media as % of total digital- marketing spend 80% (%) 2011 In 3 years 60% 40% 20% 0% <5% 5%-10% 10%-20% 20%+ Source: Webtrends, Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 19 Produced by
  20. 20. Paid media on Facebook Faceboook advertising model Comparison between search advertising and social advertising Targeted ads and social context ads on Facebook Facebook advertising is moving from organic to paid, similar to the change in search advertising Source: company, Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 20 Produced by
  21. 21. Performance metrics Metrics used worldwide to measure the value Ad performance comparison of social-media marketing activities Facebook CTR and CPC by industry (2012) Facebook best practices Electronics Retail Food/Drink Finance Beauty Clothing Social Gaming Likes Alcohol brands CTR (%) Browser games Flash sales CPC (US$) Dining Entertainment Other CPG Education 0.25 0.20 0.15 0.10 0.05 0.00 0.50 0.05 1.00 0.10 1.50 0.15 2.00 0.20 Source: eMarketer, Webtrends, Spruce Media, Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 21 Produced by
  22. 22. Leveraging engaging mobile users N.A MAU vs International MAU Engagement (DAU/MAU)1,200 International MAU N.A. MAU 70% DAU/MAU (m)1,000 60% 50% 800 40% 600 30% 400 20% 200 10% 0 0% 3Q09 3Q10 3Q11 3Q12 3Q09 3Q10 3Q11 3Q12 Mobile MAU vs PC MAU1,200 (m) Mobile MAUs PC MAUs • 70% of mobile users are likely to login daily1,000 • 40% of desktop users are likely to login daily 800 600 400 200 0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 22 Produced by
  23. 23. Expanding product portfolio Sponsored stories amplify the social graph coverage Promoted posts amplify the fan coverage FBX: enabling retargeting in FB App Center: unlocking the bottle neck©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 23 Produced by
  24. 24. FB performance by ad placement Mobile newsfeed ads generate higher CTR, FB CTR by placement (Spruce Media) compared to desktop right-hand side (Index) 25 20x + 1.40% 28x 20 25x 1.20% 14x 1.00% 15 18x 0.80% 10 8x 0.60% set CTR on Desktop right- hand side as index 1 0.40% 5 0.20% 0 0.00% FB TBG Sprucemedia Desktop right- All FB (formerly Desktop Newsfeed Mobile newsfeed hand side Marketplace) newsfeed (Desktop & Mobile) FB CPC by placement (Spruce Media) FB CPM by placement (Spruce Media) 0.8 (US$) set CPC on Desktop right- 7.0 (US$) hand side as index 100% 0.7 6.0 17x 0.6 5.0 63% 60% 12x 0.5 11x 4.0 0.4 48% set CPM on Desktop right- 3.0 hand side as index 1 0.3 2.0 0.2 0.1 1.0 0.0 0.0 Desktop right- All FB (formerly Desktop Newsfeed Mobile newsfeed Desktop right- All FB (formerly Desktop Newsfeed Mobile newsfeed hand side Marketplace) newsfeed (Desktop & hand side Marketplace) newsfeed (Desktop & Mobile) Mobile)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 24 Produced by
  25. 25. FB performance by ad format FB CTR by ad format (Spruce Media) FB CPC by ad format (Spruce Media) 0.60% 0.8 (US$) 9x set CPC on Desktop right- 117% 0.7 0.50% hand side as index 100% 0.6 0.40% 0.5 74% set CTR on Desktop right- 67% 0.30% 0.4 hand side as index 1 53% 3x 4x 0.3 0.20% 2x 0.2 0.10% 0.1 0.00% 0.0 Domain Ad Page Like Ad Page Like Page Post App Shared Page Post Ad Domain Ad Page Like Ad Page Like Page Post App Shared Page Post Ad Sponsored Like Sponsored Sponsored Like Sponsored Story Sponsored Story Story Sponsored Story Story Story FB CPM by ad format (Spruce Media) Marketers are achieving higher ROI through 1.8 FB’s new ad products (Spruce Media) (US$) 5x 1.6 1.4 C u s to m e r typ e Exa m p le s P ro d u c ts ROI 1.2 Integrated campaign with B rand Samsung 13x 1.0 set CPM on Desktop right- 3x multiple pro ducts hand side as index 1 2x 2x Integrated campaign with 70% o f campaigns have 0.8 B rand 60 ad campaigns o n FB multiple pro ducts 3x+; 49% have 5x+ 0.6 Direct marketer M GM Reso rts Custo m A udience 3x ~12x Internatio nal 0.4 Direct marketer Telepart* FB X 10x 0.2 Lo cal business Watso n Offers 7x 0.0 Domain Ad Page Like Ad Page Like Page Post App Shared Page Post Ad Sponsored Like Sponsored Story Sponsored Story©2012 Credit Agricole Securities (USA) Inc. StoryIMPORTANT: Please refer to important disclosures on the last page. Page 25 Produced by
  26. 26. Market opportunities Facebook addressable market Facebook MAU growth forecast 1,400 (m) N. America International 160 (US$bn) 1,200 120 1,000 US$145bn 800 incremental 80 market opportunities 600 400 40 200 0 0 Online Payments Mobile Commerce Ad Syndicate 2011 2016 advertising advertising network Facebook MAU Cagr forecast by region Facebook user mix by region N. America Europe Asia ROW 16% 2016 12% 8% 4% 2011 (MAUs in m) 0% N. America International 0 300 600 900 1,200 1,500©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 26 Produced by
  27. 27. New monetization opportunities Facebook app center (on iPhone): Game recommendations Facebook-sponsored search ad (example of searching for “Zynga”) Facebook’s traffic contribution (# of visits) to Apple/Android iOS and Android users, on average, download app store vs monthly downloads of Apple and Google stores more than 40 apps per year 1,600 (M) 50 1,400 40 1,200 1,000 30 800 Base case scenario 20 at one downoad 600 per user per year 400 10 200 0 0 Facebook Apple App Store Google Play Facebook Apple App Store Google Play©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 27 Produced by
  28. 28. Financial outlook Facebook revenue forecast by segment Facebook non-GAAP EPS and OPM forecast 1.5 (US$) (%) 100 16 (US$bn) Payments Non-GAAP EPS Non-GAAP OPM (RHS) Advertising 1.2 80 12 0.9 60 8 0.6 40 4 0.3 20 0 0 0 2011 12CL 13CL 14CL 15CL 16CL 2011 12CL 13CL 14CL 15CL 16CL Facebook ad rev/user vs global average Facebook payment rev/user vs global avg. 60 FB Non-FB 70 (US$) (US$) $55.0 60 $57.8 50 $44.6 50 40 $33.8 40 $36.8 30 $29.1 30 20 20 10 10 15% $0.73 2% 5% $4.12 11% $8.58 $3.16 0 0 2011 16CL Google 2011 2011 16CL eBay 2011 Source: Credit Agricole Securities (USA)©2012 Credit Agricole Securities (USA) Inc.IMPORTANT: Please refer to important disclosures on the last page. Page 28 Produced by

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