013 Qualitative Analysis of Facebook

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As we did with Inditex, let's start with the basic premises around this business:

• People like to be entertained. If you think about Facebook and Instagram from a user perspective, what we are doing when scrolling is actually entertaining our minds with the affairs of others. What is this person doing? How will this girl do this trickshot? We, mostly unconsciously, have the need to fill in the blanks of our day. I'm not saying this is healthy by the way;
• Social Media is a by definition a place where many people go. Being a "stage", it attracts various types of people. Firstly, business owners. They want to be where people are, so they can interact with them and sell their products. Then, attention seekers for whatever reason. For someone wanting to rant, they will want to be where people will actually listen;
• People need to communicate with each other. Even if I hated using the Facebook website, I still need to talk to my friends and family. That is why WhatsApp and Messenger have their own value, apart from Facebook and Instagram.

It is a great business with competitive advantages. I'd say they are durable too, unless other disruptive platforms steal their lunch or they cannibalize themselves by destroying their brand image.

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