Why This Expert Has More Faith In Facebook Inc (NASDAQ:FB), Microsoft (MSFT) Than Their Rivals
Facebook Inc (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) have a brighter future than their rivals according to Mohanbir Sawhney, a professor at Northwestern University Kellogg School of Management. One of the things Sawhney likes about the companies is the effort they are putting to grow faster than the competition.
The corporate expert has examined Facebook Inc (NASDAQ:FB) and Microsoft and believes their focus on organic growth will pave way for longer-term prosperity. Although many technology companies are today fueling growth through acquisition, Sawhney seems to be of the view that dependence on acquisition for growth can be a setup for a long-term collapse.
Organic growth builds a strong foundation
As such as Facebook Inc (NASDAQ:FB) and Microsoft have also been acquiring assets to enable them diversify and accelerate growth in different industries, their main focus as remained on driving organic growth. They have remained committed to increasing market share by rolling out products that customer want and improving the revenue they generate from each customer in their roster.
Facebook Inc (NASDAQ:FB) reported a 52% increase in revenue to $5.2 billion in the most recent quarter, producing a net income of $1.5 billion. The net income for the quarter nearly tripled from the like period a year ago.
As for Microsoft, the company’s revenue edged up slightly to $22.8 billion in the most recent quarter despite nearly 10% pullback in PC shipments during the quarter.
Sawhney suggests that the success of Facebook and Microsoft was supported by the company’s determination to increase the monetization of their users. The 8% growth of Microsoft’s Intelligent Cloud business contributed significantly to the topline improvement in the latest quarter. When it comes to competition, Sawhney sees Microsoft better placed to outperform rivals such as International Business Machines Corp. (NYSE:IBM) and Hewlett Packard Enterprise Co (NYSE:HPE).
As for Facebook Inc (NASDAQ:FB), the company’s burgeoning user number and expansion in online video space are also paving way for topline growth. Facebook is eying the $100 billion video advertising market by creating a second screen for television viewers.
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