What Is Facebook’s Next Move?

Yesterday, Facebook posted its quarterly earnings report. The social network increased ad revenue by 53%, generating total revenue of $8.8 billion.

Facebook, with 1.2 billion daily active users, is in a good spot—but it wants to be in a better one. The company, like Apple and Google, wants to diversify its revenue stream.

Google, whose business relies heavily on ads, has been pushing hardware such as smartphones and home accessories, as well as developing virtual reality and self-driving cars. Apple’s services business is growing steadily and accounting for an increasingly significant percent of the company’s overall business, which for a decade has been driven almost entirely by the iPhone.

And Facebook? Facebook relies on ads like Google, too. But it wants more. It’s dabbled with ecommerce and games, but the company seems most set on video content.

Here’s one suggestion from analyst Richard Kramer via CNBC: acquire something. He gave Spotify and Activision as options. Regardless of his specifics, his overall point was clear: breaking into video is going to be difficult without an acquisition—and based on Facebook’s finances, the company is now in a strong position to pull that move off ($30 billion in cash!).

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