We’re about to get earnings reports from all the biggest companies in tech.
Ahead of those reports Ben Schachter at Macquarie Research filed a research report on Facebook.
In his report, he nudges tech companies to follow Facebook’s lead, and provide better clarity around their thinking.
“We regard FB’s 3Q’14 earnings call as perhaps the most informative Internet earnings call in years,” analysts from Macquarie Capital wrote in a recent note.
Investors love Facebook because, unlike Google or Amazon, the company explicitly explained its vision for the future.
Last quarter, Facebook CEO Mark Zuckerberg very clearly outlined his three-, five-, and ten-year roadmap for the company.
“We believe that other Internet companies would do well to emulate FB’s model and improve transparency with investors,” analysts write.
Amazon, Google, and Facebook are all taking moonshots and making ambitious, potentially transformative plans for the future that require big investments, but only Facebook gave a distinct timeline and its progress on those investments, including when they may eventually turn into revenue.
Amazon will stress the importance of its delivery drones for satisfying our future needs for instant delivery, and Google will assure investors that its self-driving cars will revolutionise transportation, so everyone will want one eventually. But investors hate “eventually.” They want to know when exactly these big future investments will actually start contributing to the bottom line, and what meaningful progress is being made towards that point. By laying out a roadmap with detailed insight into Facebook’s investment rationale, Zuckerberg gives investors something to measure and judge against.
For example, although he talked about Oculus and virtual reality as part of Facebook’s ten-year-plan, he laid out every milestone the technology had passed, including teh first developers conference, Facebook’s new prototype VR headset, and more than 100,000 developers kits shipped all over the world.
“Investors will be able to track progress toward goals and measure results, rather than simply listen to assurances from management,” analysts write. “The contrast between this framework and that shared by Amazon, for example, is stark.”
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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