USA/FILE: Wall Street finishes higher in anticipation of an upcoming jobs report. Facebook crosses the one billion user mark, but doubts about its ability to make money for its investors persist
Record ID:
187175
USA/FILE: Wall Street finishes higher in anticipation of an upcoming jobs report. Facebook crosses the one billion user mark, but doubts about its ability to make money for its investors persist
- Title: USA/FILE: Wall Street finishes higher in anticipation of an upcoming jobs report. Facebook crosses the one billion user mark, but doubts about its ability to make money for its investors persist
- Date: 5th October 2012
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (OCTOBER 4, 2012) (REUTERS) (SOUNDBITE) (English) JOHN ABELL, REUTERS COLUMNIST, SAYING: "No other social network has done this before. Yes the history of social networks is pretty brief - they've been around for exactly 10 years or something like that. But no one's done this, no one has come close. It's a remarkable achievement given all the bad press they get, deserved or not about how they handle their members. And so you have to hand it to them for that. But in the grand scheme of things, we kind of all saw this coming and a billion monthly active users is hardly discernible from 950 million active users."
- Embargoed: 20th October 2012 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Economy
- Reuters ID: LVA2ZSI38MV5DLUMGJAOWJU0OIMU
- Story Text: The S&P 500 extended gains to a fourth day on Thursday (October 4), putting it on the cusp of a new five-year high if Friday's jobs report shows encouraging signs for the labor market.
The rally was broad, with all 10 S&P 500 sectors up and financials in the lead. The S&P's financial index gained 1.5 percent.
In the tech arena, Google Inc shares hit a new 52-week high of $769.89 earlier in the session. The stock ended up 0.7 percent at $768.05 (USD).
The number of Americans filing new claims for unemployment benefits rose only slightly last week after a big drop the week before, the Labor Department reported on Thursday, leading to hopes that Friday's closely watched non-farm payrolls report would show improvement.
The Dow Jones industrial average gained 80.75 points, or 0.6 percent, to 13,575.36 at the close. The S&P 500 rose 10.41 points, or 0.72 percent, to 1,461.40. The Nasdaq Composite added 14.23 points, or 0.45 percent, to end at 3,149.46.
The S&P 500 has climbed 16.2 percent so far this year. That strong gain, combined with weak global economic data and questions of whether Spain's bailout will come to pass, have prompted some investors to say the rally is starting to look overextended.
The financial performance of the markets have not been matched by the performance of Facebook's shares, but the company did achieve an historic record on Thursday when it was announced that it passed the 1 billion user mark in September, a level of global penetration that is both a remarkable achievement for an eight-year-old social network and a heightened challenge to its quest for sustained growth.
"No other social network has done this before," said John Abell, a columnist for Reuters Media File.
"It's a remarkable achievement given all the bad press they get, deserved or not about how they handle their members. And so you have to hand it to them for that. But in the grand scheme of things, we kind of all saw this coming and a billion monthly active users is hardly discernible from 950 million active users," he added.
Facebook, which has endured a bruising four months in the stock market since a haphazard May 18 initial public offering, has acknowledged that a slowdown in new-user acquisition is inevitable as its worldwide reach expands.
Doubts over whether the company can squeeze more and more dollars out of each network member - given well-publicized struggles to monetize the growing ranks of users who access Facebook from mobile devices - have shaved more than 40 percent off Facebook's value since its IPO, although shares still trade at a lofty 45 times projected 2012 earnings
"There's money to be made. The business makes some kind of sense. The issue is a matter of scale. Clearly they're not worth 100 billion dollars (USD) today and probably weren't the day that they went public. They may not be worth 50 billion dollars. We won't know until they have revenue which investors can say justified a P/E ratio that is normal for a company of that size," said Abell.
Founded by Mark Zuckerberg in a Harvard dorm in 2004, Facebook took three years to reach 50 million users. By 2010, that hit 500 million. But with Google Inc launching its own social network and other services from Twitter to YouTube vying for Web surfers' time, the social network is keen to keep rolling out new products to keep its members engaged. - Copyright Holder: REUTERS
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