Dinero del Cielo: Investing in Facebook

Facebook (FB) just bought WhatsApp, paying $16bn in cash and stock and $3bn in RSUs. WhatsApp has 450m active users, of which 72% are active every day. It has just 32 engineers. And its users share 500m photos a day, which is almost certainly more than Facebook.

This is interesting in all sorts of ways – it illustrates most of the key trends in consumer tech today in one deal. First, it shows the continued determination of Facebook to be the ‘next’ Facebook. It’s striking to compare the aggressive reaction to disruption shown by Google (GOOG), Facebook and other leading web companies today with how some of their predecessors a decade ago stumbled and lost their way.

• Smartphone apps can access your address book, bypassing the need to rebuild your social graph on a new service
• They can access your photo library, where uploading photos to different websites is a pain
• They can use push notifications instead of relying on emails and on people bothering to check multiple websites
• Crucially, they all get an icon on the home screen.

Facebook is setting its sights on its next five billion users — even if they don’t yet have Internet access.

Called Internet.org, the social network has joined forces with Nokia, Qualcomm, Samsung, Ericsson and others to bring web access to the five billion people, primarily in developing countries, that don’t own smartphones or have access to affordable connectivity.

“There are huge barriers in developing countries to connecting and joining the knowledge economy,” Zuckerberg said in a statement. “Internet.org brings together a global partnership that will work to overcome these challenges, including making internet access available to those who cannot currently afford it.”

According to the United Nation’s Millennium Development Goals report, 2.7 billion people or 39 percent of the world’s population will be on the Internet before the end of 2013.

In a proposal entitled “Is Connectivity a Human Right?” Zuckerberg lays out his plans for the organization and its solutions to equipping the rest of the world with the tools to connect with each other and gain access to the world’s greatest repository of information. The “rough plan” focuses on spreading connectivity through mobile devices with three main “levers.”

The Internet.org announcement comes just a few months after Google’s announcement of its Project Loon, which aims to bring connectivity to the rest of the world through Internet-equipped balloons. Announced in June, Google has begun testing the balloons in New Zealand and more recently in Northern California. Just this month Bill Gates criticized the project, saying that fighting malaria was more important.

Is internet access a fundamental human right? Facebook and a coalition of six major telecom companies believe it is.

On Tuesday night, they revealed Internet.org — a global partnership that wants to put the web’s vast trove of knowledge at the fingertips of every man, woman, and child around the world.

Today, just over one-third of Earth’s population has access to the internet, which means 4 billion to 5 billion others are unplugged. Facebook thinks we can do better.

Joined by major communications providers like Samsung, Nokia, Qualcomm, and Ericsson, the global initiative will focus on three key challenges in developing countries:

1. Make access affordable. The organization believes this can be accomplished by developing lower-cost, higher-quality smartphones.

2. Use data more efficiently. The goal here is to develop better apps and compression tools to handle data more effectively. Facebook, for example, wants to lower its Android app’s data rate from the current 12 megabytes a day down to just one.

3. Have businesses drive local access. Facebook says this “includes testing new models that align incentives for mobile operators, device manufacturers, developers and other businesses to provide more affordable access than has previously been possible.”

“Everything Facebook has done has been about giving all people around the world the power to connect,” Facebook CEO Mark Zuckerberg says in a statement. “There are huge barriers in developing countries to connecting and joining the knowledge economy. Internet.org brings together a global partnership that will work to overcome these challenges, including making internet access available to those who cannot currently afford it.”

The effort is just the latest example of a major technology firm seeking to shuttle potential growth opportunities under a humanitarian banner. It’s “a reflection of how tech companies are trying to meet Wall Street’s demands for growth by attracting customers beyond saturated markets in the United States and Europe,” says Vindu Goel at the New York Times, “even if they have to help build services and some of the infrastructure in poorer, less digitally sophisticated parts of the world.” (Facebook growth has largely stalled in existing markets at just over 1.1 billion users.)

Sources:

Seeking Alpha

abcnews.go.com

To the Sun We Shall Journey: Best SRI mutual funds

 

n the world of investing, conscience, it seems, costs nothing. You can have your do-gooder cake and eat it, too. Consider iShares MSCI USA ESG Select Index (symbol KLD), an exchange-traded fund that tracks an index of companies that it says follow high “environmental, social and governance” standards. Over the past five years, the fund returned an annualized 2.3%, compared with 1.7% for Standard & Poor’s 500-stock index. Calvert Equity Fund (CSIEX), one of the largest and oldest funds in the sphere of socially responsible investing, or SRI, gained 6.9% annualized over the past 15 years, compared with 5.5% for the S&P.

Socially responsible investing has come a long way since I started writing about it nearly 20 years ago. In 1995, there were only 55 mutual funds that engaged in SRI, with $12 billion in assets. Now there are 493, with assets of $569 billion. Socially responsible investors include “cor­porate responsibility and societal concerns” as “valid parts of investment decisions,” according to the Forum for Sustainable and Responsible Investment, a trade group.

there’s the fund that proves you don’t have to sacrifice profits at the altar of morality: Domini Social Equity. Its annual fee of 1.23% keeps it off my recommended list, but you can’t help liking the fund, which was founded by Amy Domini. As a stockbroker in 1980, Domini recognized that her clients wanted to put their money into responsible companies and to avoid bad actors. With Peter Kinder and Steve Lydenberg, she devised an SRI index of 400 stocks and launched a fund to follow it. Over the past 15 years, the fund gained an annualized 5.1%, trailing the S&P by less than half a point per year.

Since 2006, Domini has been actively managed, but you can still buy the index that Amy Domini helped develop through an ETF with yearly expenses of just 0.50%. The five-year return of iShares KLD 400 Social Index (DSI) has lagged the S&P by just 0.2 point per year. So, giving up practically nothing, you can get a warm feeling that your money is serving a useful purpose—even if the fund manager or index composer is deciding what that purpose should be. Not a bad deal.

 

Ariel Fund – $863.5 million

The Ariel Fund is part of the family of mutual funds managed by Ariel Capital Management based in Chicago, IL. According to the firm the fund invests in companies with market capitalizations primarily under $1.5 billion, with an emphasis on small-cap stocks. Market capitalization is a way to determine the size of a company and is calculated by multiplying a firm’s outstanding shares by the dollar value of a single share. “Small-cap stocks” mean companies whose market capitalization is generally below $2 billion but above $300 million. The Arial Fund’s social criteria includes screens for environmental impact, tobacco, weapons, nuclear energy, and diversity.

Stock symbol:ARGFX

Pax World Balanced Fund – $1.5 billion

Part of the Pax World Mutual Funds family based in Portsmouth, NH. According to the firm, Pax World Balanced invests in companies “that provide goods and services, such as health care, technology, pollution control, housing, utilities, and education, that improve the quality of life.” Pax World Balanced is a “domestic hybrid” fund, meaning it holds a mix of stocks and bonds of U.S. based companies.

Stock symbol:PAXWX

PIMCO Total Return III Institutional – $2.225 billion

PIMCO is one of the largest fixed-income management firms in the world. The PIMCO Total Return III Institutional is a fund for institutional investors such as pension funds. The minimum investment is $5 million. According to the firm the fund invests primarily in corporate bonds, U.S. government securities, and mortgage-related securities. Its investments may not go to issuers who engage in “the operation of gambling casinos, the provision of healthcare services, or the manufacture of alcohol, tobacco products, pharmaceuticals, pornography, or military equipment.”

Stock symbol:PRFAX

Ariel Appreciation – $753.5 million

Ariel Appreciation invests in “mid-cap” stocks, which are companies with a market capitalization generally between $2 billion and $10 billion. According to the company, Ariel Appreciation limits its investments to firms the size of $200 million to $5 billion. It uses the same screens as the larger Ariel Fund: environmental, tobacco, weapons, nuclear energy, and diversity.

Stock symbol:CAAPX

Parnassus Equity Income – $1.3 billion

Parnassus Equity Income is a member of the Parnassus Funds family based in San Francisco. As an equity income fund it tries to grow through price appreciation, but also by investing largely in dividend paying stocks. According to the firm, the fund can invest up to 10 percent of its assets in community development loan funds. It may not invest in companies “that produce alcohol, tobacco, weapons, or nuclear energy.”

Stock symbol:PRBLX

 

 

Sources at

http://www.kiplinger.com

http://socialinvesting.about.com/