In its IPO filing, Facebook gave standard (boring) boilerplate explanation of what it’ll do with the cash it raises: "working capital and other general corporate purposes."

Nearly $9 billion is a lot of working capital. Facebook could use it to beef up four key areas.

Ramp up mobile. Facebook’s filing to the Securities and Exchange Commission warned potential investors several times about its weakness in mobile.

"We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven," the company wrote.

Facebook wasn’t built with mobile in mind — it was created in 2004, after all — and it’s been slow to develop device-optimized apps. Facebook for iPad, Apple’s (, Fortune 500) tablet, wasn’t launched until October. That was 18 months after the iPad launched, and Facebook’s delay gave third-party apps a chance to jump in.

The biggest opportunity in mobile: advertising. The company doesn’t yet serve ads to users who access Facebook through apps or its mobile site.

Package more data. Facebook had 845 million monthly active users as of December 31, which means lots of tasty bits to sell to advertisers.

"Facebook’s product is data, period," says Rebecca Lieb, a digital advertising and media analyst at Altimeter Group. "Boy, do they have a lot of it and boy, are they going to get more of it."

That increased data payload comes as Facebook continues to expand its tentacles deeper into the Internet beyond its own site.

Facebook’s stunning growth - and billionaires

User profiles have long been an easy way for advertisers to target — "I like ‘The Big Bang Theory’ and The Gap" — but now Facebook is connected to a lot else that its users are doing online.

If you listen to a song on Spotify, watch a video on YouTube or read an article on The Washington Post, that activity could be posted to Facebook. In turn, Facebook can package that data in ways that help advertisers piece together your interests — and decide which kinds of ads you’ll respond to best.

"It’s one thing to have eggs and flour and sugar — it’s another thing to have a cake," Lieb says. "What you like on Pinterest, which TV shows you watch … all of this helps inform ad decisions, and the more information the better. "

Streamline ads. Of course, all of this potentially valuable data means squat for advertisers unless users are exposed to and engaging with the ads served.

Advertising accounted for 85% of Facebook’s total 2011 revenue, or almost $3.2 billion. To date, most of Facebook’s ads have been display ads: banners, images and other graphics.

Facebook is serving those ads to a hugely massive user base. In the third quarter of 2011, Facebook served 28% of all U.S. display ad impressions — more than Google (, Fortune 500), Yahoo (, Fortune 500), Microsoft (, Fortune 500) and AOL () combined.

"Facebook is serving so many display ads, but businesses are asking: How do we get leads off of this?’" says Jed Williams, a social/local media analyst at research firm BIA/Kelsey.

"It’s getting to the end of the experimentation period," he adds. "Facebook ads have to drive bigger performance than they have in the past. They feel the weight of that pressure."

In response, Facebook has begun integrating ads directly into users’ content feeds. These "sponsored stories" — which sparked users’ ire when they launched in January 2011 — take a few forms, and they hawk brands that you or your friends have interacted with on Facebook.

"Sponsored stories is emblematic to me of the big push Facebook is making around ads in the social graph," Williams says. "They’re going to keep iterating and finding new ways to personalize ads."

Attract talent. Tapping into new revenue streams is unquestionably important for Facebook, but so is hiring people to create its products.

One method is acquisition. Facebook likes to buy startups, kill their products, and deploy their engineers on new projects. Facebook’s chief technical officer, Bret Taylor, came in the door that way. So did Facebook’s head platform engineer, Carl Sjogreen, and dozens of other executives.

Facebook referenced the "acqhiring" practice in its IPO paperwork, saying that it intends to continue that strategy.

From a traditional hiring standpoint, Facebook will likely have to rethink its compensation packages. Startups often sweeten the salary offer by throwing in attractive company equity.

"They can’t attract people with those lovely pre-IPO shares anymore," says Lieb, the Altimeter analyst. "Silicon Valley engineers are high in demand, and you have to find a way to bring them to your company." 

Source

Chinese manufacturing indexes rose as the world

The S&P/Case-Shiller index of property values in 20 cities dropped 3.3 percent from November 2010, the smallest decline in 10 months, after decreasing 3.4 percent in the year ended in October, according to the median forecast of 30 economists surveyed by Bloomberg News. Consumer confidence in January climbed to the highest level since February 2011, another report may show.

More stable home prices may help persuade Americans to take advantage of record-low mortgage rates, supporting the industry that precipitated the last recession. At the same time, the recovery in housing may be slow to develop as foreclosures put more properties onto the market.

]]> http://thefinanceweblog.com/home-prices-in-20-us-cities-probably-fell-at-a-slower-rate-bloomberg/feed/ http://thefinanceweblog.com/treasury-five-year-yield-falls-to-record-low-on-federal-reserve-strategy-bloomberg/ http://thefinanceweblog.com/treasury-five-year-yield-falls-to-record-low-on-federal-reserve-strategy-bloomberg/#comments Mon, 30 Jan 2012 00:00:16 +0000 John http://thefinanceweblog.com/treasury-five-year-yield-falls-to-record-low-on-federal-reserve-strategy-bloomberg/ Treasury five-year note yields fell to the lowest level ever after Federal Reserve officials unexpectedly said their benchmark interest rate will stay low until at least late 2014.

Yields on the securities set three consecutive records after Fed Chairman Ben S. Bernanke said Jan. 25 that the central bank is considering additional asset purchases to boost growth. U.S. government debt rose for a third day yesterday as a report showed the U.S. economy grew at a slower-than-forecast 2.8% annual pace in the fourth quarter. The Labor Department is expected to report on Feb. 3 that unemployment remained at 8.5 percent this month.

]]> http://thefinanceweblog.com/treasury-five-year-yield-falls-to-record-low-on-federal-reserve-strategy-bloomberg/feed/ http://thefinanceweblog.com/harvards-feldstein-sees-slow-growth-while-doubting-fed-easing-bloomberg/ http://thefinanceweblog.com/harvards-feldstein-sees-slow-growth-while-doubting-fed-easing-bloomberg/#comments Sat, 28 Jan 2012 09:04:15 +0000 John http://thefinanceweblog.com/harvards-feldstein-sees-slow-growth-while-doubting-fed-easing-bloomberg/ U.S. economic growth may not top 2 percent this year and a third round of quantitative easing by the Federal Reserve would have little effect, said Martin Feldstein, a professor of economics at Harvard University.

]]> http://thefinanceweblog.com/harvards-feldstein-sees-slow-growth-while-doubting-fed-easing-bloomberg/feed/ http://thefinanceweblog.com/jobless-claims-in-us-rise-displaying-seasonal-volatility-bloomberg/ http://thefinanceweblog.com/jobless-claims-in-us-rise-displaying-seasonal-volatility-bloomberg/#comments Thu, 26 Jan 2012 19:44:18 +0000 John http://thefinanceweblog.com/jobless-claims-in-us-rise-displaying-seasonal-volatility-bloomberg/ Claims for U.S. jobless benefits rose last week, displaying the usual volatility around holidays that has masked an improvement in the labor market.

Applications (INJCJC) for unemployment insurance payments climbed by 21,000 to 377,000 in the week ended Jan. 21, up from an almost four-year low in the prior period, Labor Department figures showed today in Washington. The median forecast of 47 economists in a Bloomberg News survey projected 370,000.

Companies are picking up the pace of hiring as job cuts abate. At the same time, faster job gains are needed to maintain household spending, the biggest part of the world

The country’s private creditors are being asked to accept longer maturities and lower interest rates on new bonds swapped for their existing ones.

Greece, which is negotiating alongside fellow eurozone nations and the International Monetary Fund _ its bailout rescuers _ wants interest rates as low as 3 percent on the new bonds. But the private creditors believe that is too low and are aiming for about 4.5 percent.

Both sides say a deal is nevertheless very close, heartening investors. The euro was the main beneficiary, climbing a further 0.9 percent to $1.2995.

Greek officials say negotiations on the private debt writedown are continuing over the phone, while no appointment has been set yet for new face-to-face talks this week.

An agreement is necessary if Greece is to get the next batch of bailout cash that would prevent a devastating debt default _ Greece does not have enough money to cover a euro14.5 billion ($18.7 billion) bond repayment in March. A deal would allow the country to receive a second bailout package from other European governments and the IMF, and cut Greece’s debt from an estimated 160 percent of its annual economic output to 120 percent by 2020.

Greece will likely be the main topic of discussion at a meeting later of the 17 eurozone finance ministers in Brussels.

“Hopes are high that today’s meeting in Brussels will produce some positive plans to tackle the ongoing debt issues and balance out some of the frustration felt by the inability of Greece to come to an agreement with its lenders,” said David Jones, chief market strategist at IG Index.

Those hopes have helped shore up markets at the start of a week, which will also feature the annual meetings in Davos, Switzerland and the U.S. Federal Reserve’s first rate-setting meeting of the year.

In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,759 while Germany’s DAX rose 0.2 percent to 6.414. The CAC-40 in France was 0.3 percent higher at 3,332.

Wall Street was poised for a steady, if unspectacular, opening with little economic news on the calendar _ Dow futures were unchanged at 12,658 while the broader Standard & Poor’s 500 futures rose 0.1 percent at 1,310.

Optimism that Greece will clinch a deal as well as a run of successful European bond auctions and solid economic and corporate news, not least from the U.S. and China, have brightened market sentiment this year. Many stock indexes have risen to five-month highs, while the euro has clambered off 17-month dollar lows to head back towards the $1.30 mark.

Later in the week, investors will be monitoring the meeting at the Fed.

Though the Fed is expected to keep its super-loose monetary policy unchanged, there will be great interest in the outcome of the meeting. It will be the first time the Fed will be publishing its interest rate forecasts out to 2016, part of a strategy to enchance communication with financial markets.

Investors will be particularly interested to see how long it expects interest rates to remain low _ previously the Fed said it expected to keep them low until the middle of 2013.

“Most, ourselves included, expect the projections to suggest the Fed sees rates on hold well into 2014,” said Adam Cole, an analyst at RBC Capital Markets.

In the oil markets, traders are watching developments in the Persian Gulf, too. Iran has threatened to close the Strait of Hormuz if the U.S. and other countries impose more sanctions on it because of its nuclear program. Many analysts doubt that Iran could set up a blockade for long, but any supply shortages would cause supplies to tighten.

As a result, prices have remained well-supported _ benchmark crude was up 30 cents at $98.63 a barrel in electronic trading on the New York Mercantile Exchange.

Source