Yesterday, Fred Wilson had an interesting post on some 2015 predictions.  I’ve read his blog for many years and he is always offering interesting thoughts on software, engineering, venture capital and tech as a whole.

He wrote a few things of interest to me yesterday.  Here is the article quote:

6/ Capital markets will be a mixed bag in 2015. Big tech names will continue to access capital easily (see 1/), but the combination of rising rates and depressed prices for oil will bring great stress to global capital markets and there will be a noticeable flight to safety around the world. Safety used to mean gold, US treasuries, and blue chip stocks. Now it means Google, Apple, Amazon, and Facebook.

And a discussion ensues in the comments–use this link.  The quote above that states that these larger companies are “safe” comparably to what compared to historically safe securities like blue chips is interesting in itself.  Many investors would take the exact opposite thought process and own more CPG, financial, energy and industrial offerings.

In regard to their core offering, FB is doing well in terms of growth:

FB MAUs
Yes, there is some leveling off in the NA regions, but EU and Asia continue to grow along with the rest of the world.  In terms of social networks, they are the first big undisputed champion and this user base is not going to evaporate any time soon.  They are managing this well, and when I speak with friends about it, they have stated that mobile first ideal was executed really well.

What is truly fascinating about FB is how they are diversifying their portfolio of offerings.  Buying WhatsApp, Instagram and Oculus are a clear sign that they are trying to adapt to the changing landscape and skate to where the puck is going.  Digital businesses are different beasts than brick and mortar–building expertise and management that understands how to execute may well set them apart as THE digital conglomerate of the future.

If you consider the big tech precedents, Google is the first to come to mind.  They built a great product and revenue model to surround it.  They proceeded to print money and invest in R&D around other offerings.  Nothing has been near as popular as search, but they are doing a lot of things that may well drive tech in the future (driverless cars, wearable computing, internet of things.)  Youtube was also a fantastic investment @ $1.65B — though some panned it at the time.  Their numbers look pretty good too!

As an investor, I don’t necessarily look at those companies as though they are the “safe” bet, but they do have the potential to be the blue chips of tomorrow.  P/E ratios for most of them look out of whack, but it seems that monetizing these services DOES happen consistently by sheer number of users.  Businesses NEED to get in front of them to compete for buying decisions.  The companies that can consistently lock in users with valuable products will be able to monetize.

I love following the tech companies because their businesses are so transformative to our culture.  I wrote a post on Amazon a while back which I just realized isn’t posted yet, I’ll go back and do that soon.