W.R. Berkley 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“The second quarter, by and large, was a continuation of the trends that we saw in Q1. Primary comp rates continue to move up at a healthy pace.”

“The property market has always been one that’s made us scratch our head from time to time. When the earth shakes or the wind blows, it seems as though people choose to back that out of the results. And when Mother Nature is kind to us, it seems as though people call it brilliance.”

“Our new business relativity metric came in at 3.6%. This is a metric that we talked about with some of you in the past. It’s our effort to try and compare the rates that we’re getting on new business with our renewal book. We think that this is an important metric because, obviously, you want to make sure the new business that you’re adding to the portfolio, in no way, is undermining or diluting the margin in your book. And, in addition to that, obviously, new business as opposed to renewal business you know less about, so consequently, some type of surcharge would be logical and appropriate.”

“When you put all the pieces together, we ended up with a combined of a 96.6% compared to 98.2% for the second quarter last year”

“f you look at the profitability of insurance companies, insurance companies have always made their money from investment income, and investment returns are down substantially…the fact is you’re facing serious changes in what’s going off your portfolio and what you’re able to invest in. The alternative is to bet on no inflation for an extended period of time, which is not something we’re prepared to do, nor are most of our competitors.”

“if you look at the economic model of an insurance company, much of the rate increases people have been seeking stem from their concerns having to do from loss activity. And the impact, which is even more leveraged of investment income declining, is likely to force people to raise rates even beyond what they had done to date.”

“First of all, the skills and distribution required to write the kind of business we do is really quite different than what they do. Second of all, Berkshire is going to write at a profit. My friend, Mr. James [ph], is absolutely determined to get his share of the market, but not, I emphasize not, at any cost. He’s going to write the business where he thinks he can make money. And nobody should be afraid of that competition. He’s going to give good service, give good capacity. And he’s going to want to share the market, and he’s going to do it through those basis. But he’s not going to be a price cutter. Some people have entered the business to buy their share. I think Berkshire, by and large, is going to try and do it in other ways using their capacity, their credit and their ability to put large lines down. But I don’t think most of the people we compete with have the market position or the underwriters to move down to write smaller risks…But I don’t think Berkshire is going to be a market leader in pricing. I think they’re going to be — try to be a market leader in capacity and quick answers because that’s something they have.”

Cash America 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“While I admit being disappointed with our results, I can’t say that I’m really shocked by the outcome this quarter.”

“the ongoing weakness in loan demand in our U.S. storefronts throughout the quarter made June a particular tough month for us, causing our quarterly results to fall short of our expectations.”

“I think some of our followers were surprised that we did not attribute a large portion of the guidance shortfall to a further decline in gold prices. And while Tom will soon confirm to you that the decline in net revenue from the commercial sale of scrap gold certainly had a significant negative impact on a year-over-year basis this quarter, I can tell you that we had factored a large portion of that decline into the Q2 guidance ”

“Also, the net revenue from over-the-counter retail sales actually beat our forecast for the quarter by an amount that was actually large enough to offset a significant portion of the higher expense levels that we mentioned in our pre-release.”

“we would have been on target had we gotten the growth we had forecasted for loan asset”

“We don’t believe our customers are finding new sources of short-term credit other than perhaps some migration to the Internet, nor do we believe we are losing share to our competitors. I don’t know that our storefront customers are consciously trying to deleverage but we don’t see any indication that our traditional customers have regained enough confidence in their personal financial situation to risk additional personal leverage at this time.”

“This dynamic is particularly evident in those states with persistently high unemployment rates where we have large footprints”

“the challenging environment for our U.S. pawn business is not new news”

“I don’t have any further insights into what, if anything, the CFPB may do that could affect our business here in the U.S., but I will say that it’s one of very few online lenders in the U.S. operating a state-by-state license model. We would welcome any efforts the CFPB may take to address those lenders who have elected to operate outside the state regulatory environments.”

“I think it takes some time to transition customers. It’s not as convenient, it’s not as easy to take your TV or your Xbox or your iPad that you’re using on a daily basis and — where if you had an excess piece of jewelry, it’s a lot of easier to — and more motivating perhaps to go in and use those items.”

“I’m not hearing a lot of anecdotal things that people have come in and say, “Oh, we noticed the price of gold has dropped $300 an ounce or we’re in here to buy things.” I don’t think our consumers operate on that basis. ”

“anecdotally, I keep hearing from our store managers around the country that our customers are self-regulating to a large degree. While we have an opportunity on the value of their collateral to loan more money. And clearly, we offer them what we think is a fair loan amount for their items. A lot of customers are taking a lot less. Again, they’re trying to regulate their budgets and make sure they come back and pick the items up. I think the jewelry in particular, that we haven’t pawned today are things people don’t want to forfeit, which is one of the reasons our redemption rates continue to be up year-over-year”

“My expectation is that competition will probably shrink, particularly in the pawn business, in future periods here. Part of what we’ve been dealing with for the last few years has been competition from these gold-buying shops that pop up quickly in the shopping centers and corners around the country that are just buying and selling gold. You can drive down the streets of a lot of the neighborhoods where we have shops, and over the last couple of years, you see a lot of these businesses and weren’t doing anything but buying and selling. They weren’t licensed to do loans, et cetera. I think the — that business can become much more difficult and, quite honestly, if you’ll recall, other comments I’ve made on previous quarters’ calls, it’s really somewhat a function of the gold value but it’s also significantly a result of lower available scrap gold for disposition. Again, I think we went through 2000 — and late ’10 and 2011, early 2012, where, if you look at our business, and I think it existed throughout the country, people were unloading a lot of excess gold. And I think that game is over, to a large degree, and I think that those folks who have been competing with us in the gold business are going to have a difficult time remaining in business.”

Amazon 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Trailing 12-month operating cash flow increased 41% to $4.53 billion. Trailing 12-month free cash flow decreased 76% to $265 million. Trailing-12 month capital expenditures were $4.27 billion. This amount includes $1.4 billion in purchases of our previously leased corporate office space, as well as property for development of additional corporate office space located in Seattle”

“The increase in capital expenditures reflects additional investments in support of continued business growth consisting of investments in technology, infrastructure including Amazon Web Services and additional capacity to support our fulfillment operations.”

“For Q3, 2013 we expect net sales of between $15.45 billion and $17.15 billion, a growth between 12% and 24%.”

“And it’s very early there, we’re still in the trial period, its good customer experience and we like what we see so far, but it’s very, very early. And so, it’s something that we’ll continue to work on and both from a customer experience and from an economic standpoint. And there is not much more I can add to that right now, so you have to stay tuned and see where that ends up.”

“In terms of AWS, the business is growing very, very strongly. We’ve got a great team that’s innovating on behalf of customers, launching the services, becoming more productive, which allows us to be able to lower prices”

“what we will do is, we want to make sure that we try to maximize free cash flow, that’s something that we’ve always said. So, our strategy hasn’t changed, our outlook hasn’t changed in that regard. Frequently we’d be asked historically is, double-digit operating margins are possible. And I still think it’s possible, but also if it means if a good high single-digit operating margin gets us to better, higher free cash flow over time, that’s fine too. So, again our goal is to, we don’t focus on individual margins. Our goal is to make sure that we generate free cash flow, large monthly free cash flow and use that capital efficiently, and so those are goals that we have and we certainly think that opportunity is there in each of the business that we operate in.”

“In terms of Spain, we’re very excited about what we see. It’s growing very fast. We’re in investment mode and it’s an exciting geography for us”

” the infrastructure related to our very fast growing web services business is included in tech and content, so certainly as we ramp up that business and it’s becoming more sizable and growing very fast you’re seeing that impacting that line item.”

Zynga 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“I am excited to be on the call this afternoon to introduce our new CEO, Don Mattrick.”

“Regarding my role, my top priority is to onboard Don and completely transition the CEO role to him. As Chief Product Officer, I’m excited to begin a new chapter, engaging more directly with our product teams and spending more time and focus on our near-term and long-term product roadmaps which as always been my true passion.”

“we’re not happy with the performance of our second largest franchise Zynga Poker. In Q2, while we still hold our leadership position in poker on both web and mobile, our competitors are closing the gap.”

“One of the primary reasons, bookings on Zynga Poker declined in Q2, was because of ongoing illegitimate credit card activity on the web. Performance is also being impacted by declines in web poker as user shift more quickly to mobile, and more casual, social casino games such as Slots.”

“We also launched two Casual mobile titles this quarter including Running with Friends and Draw Something 2. While Draw Something 2 has been a disappointment, Running with Friends performed well.”

“With regards to the quarter, audience and bookings continue to decline, and we’re losing share on both web and mobile.”

“In the long term, the best way to drive profitability is to grow the top line.”

“Zynga is still a young company, and we have the ability to break some bad habits and get back to good fundamentals.”

“First thing I have discovered from being here is, there is a great talent base, both in the engineering side in running live services. We do have a pipeline. We are going through a review against it. I think it has a lot of potential when you look at it in the context of hit products connecting through social spanning, multiple devices and multiple operating systems. Candidly, I don’t think we have delivered fully against that vision, and that’s the first place that we are going to start with focusing in on our core hits, dialing up product quality and navigating the transition to mobile”

“So what makes a great mobile game? Obvious answer, it’s just incredibly fun, and people love to play. People love to share with their friends and it’s easy to get in and out of over the course of the day. That’s part of the benefit that a mobile [always] brings with you. It’s just quick access in and out of experience, experiences that you love, the ability to share with friends, with family, I think, are kind of core to that.”

“In relation to what Kings accomplished, I think they’ve done an incredible job. I think they’ve built a great hit. I’ll fess up. I am a Candy Crush player and I’ve enjoyed it, evangelized it and it’s lived up to those attributes that I spoke about in the first place.”

Under Armour 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“let me start with International. As you hear, we’re really excited about it. We think there’s — as I said, it’s going to be our largest growth category next year, which will be somewhere north of 40% as we see it as a company. ”

“we’re currently doing business in 61 markets today. When I say doing business really well, it means that a lot of times, we just have a rack of clothes and maybe a distributor. And so, we’re really trying to professionalize that and really grab markets that we can make an impact in. So beginning, A, with the opportunity of where should we go based off GDP, things like that. Then we’re looking at the return because we’re not looking to make 15-year investments, although we have the ability to do that and we are, in some cases, but we understand that we also want to invest in markets that can return to us quickly. And then we’re also looking at the market expertise. And that basically comes down to do we have the leader”

“Sporting goods doesn’t exist as cleanly as it does here in the majority in the rest of the world. So having to be a lot more thoughtful and a lot more creative. And it means we’re not taking one playbook into the new markets that we’re attacking or going into”

“…introducing ourselves to consumer not just as an apparel company but as a true head-to-toe athletic brand.”

“our mix today still is heavily weighted towards cleated versus non-cleated relative to a lot of other players out there. Obviously, that cleated side of our business is really, really important to our overall Footwear business from an authenticity perspective and credibility perspective, but it does come at the lowest of low margins in Footwear. So with our mix being more weighted towards cleated, that obviously impacts our overall Footwear gross margins. Over time, though, as we are able to grow our non-cleated Footwear business, specifically things like running, which we’ve been recently doing, we have the ability — those are — those commit better margins, and that should help our mix going forward, gross margins in Footwear as we sell more non-cleated footwear.”

“I think we’re still establishing ourselves. The one thing about International and probably lessons learned over the last 17 or 18 years was that anything just takes time. And I think a longer view is what we need to approach any of these markets. I use the story of Japan a lot in sort of articulating how long it takes us, 8 years from 0 to $35 million, and then it was year 9 that they went from $35 million to $72 million and I think the tipping point really occurred. So I don’t know if that model — even with larger scale, larger size, well, resources, the things that we have today going for us, it still comes back to an investment, and it’s a prudent model.”

“we really want to bring something to China. And the gift that we want to give them is what does it feel like and what is it like to be an athlete. And so this story is about 80% experience of what does it feel like to be in the middle of the pitch at White Hart Lane with Tottenham or does it mean to feel like you’re in the ring with Canelo Alvarez and what is made to feel like being on a court with Brandon Jennings and Kemba Walker and DeAndre and our basketball assets. And so there’s a lot of education that goes to all with it. The philosophy that we’ve taken as a company is that we’ve got a great U.S. business, a great North American business that is driving and creating profit for us, and we understand that there’s a balance between our ability to utilize, I think, our North American growth and cash position, of making prudent investments in a longer-term strategy of being a global brand. As I’ve mentioned all along, our definition of global is when more than half of our revenues will come from outside the United States, and there’s a lot of reason for that. Number one, the opportunity. Our brand translates. The consumer is asking for it in other markets. And so we need a good job of making sure that we do that in a prudent way that’s very [indiscernible]. And then also, as Brad said, there’s a lot of strategic reasons for it as well. And we’re not going to make decisions based on tax rates, but the fact is that there’s a lot of things that can help us by being a more impactful and bigger global brand.”

“it’s not going to happen in 2 or 3 years. And if we get lucky and the market catches fire, great, but it’s going to take 6, 8 and 10 years and we’re sitting here telling you that we expect to be around for that much time and more. And we’re going to make the investments that’ll help us be great and be a local brand.”

ABB 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“We grew orders in a number of key sectors and geographies, including China. And we saw an encouraging trend with sequential order growth in almost all of our product businesses compared to the first quarter of the year.”

” each one of these regions is, you all know on the phone, has its own dynamics from an economic standpoint right now”

“when you look at our short cycle, the shorter cycle businesses we have, you’re really seeing some positive trends here over the last quarter that we haven’t seen in the last few. On the other hand, uncertainty around the timing of large orders is likely to persist as we saw here in the second quarter. We see that there are some large projects in the United States that are now likely to be pushed out to next year. Brazil has been weaker than expected, and that shouldn’t be a surprise given the economic difficulties that, that country has been seeing right now.”

” in Asia, we see positive signs out of China, while India remains a challenge. So in aggregate, I’d say things are moving sideways. But I wouldn’t expect demand to go down from here.”

“From a mining standpoint, it shouldn’t be — to me, it shouldn’t be a mystery that we see some pressure from mining. But mainly, we talk about if it’s really the excavation side of mining and we might call greenfield or bigger expansions in mining. When you look at order processing and things that have to do with productivity or just the efficiency that you want to drive in ore body inside of a mine, we still feel pretty good about our tender backlog in that area, things like drills, mill drives and mine hoist and those kind of things that appeal to that part of the mining industry. So again, the mining is down. But again, we see it and we, I think, understand it. ”

“What we see is the oil and gas that we expressed through marine, we haven’t seen as many offshore ships actually being contracted this year than we did last year. So that’s the change there. I don’t think that means that the CapEx is going down. You just move your CapEx into different areas because that’s the way the shipbuilding piece goes”

“Some of the upside we’ve seen has been in transportation, things like transformers that are used on electric trains. Medium voltage switchgear that’s used on the stationary part of electric trains was positive. If you go back then maybe 1.5 years ago, we’re talking about how those orders dried up because of the uncertainty around the transportation secretary, the leadership that was going on in China, whatever. We see that gradually improving. We also had some nuclear orders that are moving through also, from a power standpoint, that was a positive — from a year-to-year standpoint also on the power piece. So we think that China will continue to be in a growth phase for us. We’re not predicting double digits here in any short period of time, but this is relatively robust in the sense of the breadth of what we’re seeing in China right now for the first half from a growth standpoint. On the automation side, if you drill in low voltage, low voltage is up pretty well within China, too. Some of that has to do with the construction market in China particularly as we — as it moves west. And some of it has to do with the industrial side.”

“if you see a big increase in low-voltage drives and low voltage products in those areas, they tend to be our most sensitive short cycle businesses, that is a positive mix indicator”

“we’re not predicting any dire economic changes out there. We see orders, we see customers wanting to move at times. It’s just slower than what we’d like to see at this point. But overall, when you look at internally some of the leading indicators that we look at, as Eric mentioned, our short cycle index that we use as a key indicator here actually turned up this quarter for the first time in several quarters. And that’s a good sign for us.”

“But there’s bad signs out there also, in the sense of some CapEx spends and utility delays and those kind of things. So probably, we just see different signals and we’re cautious but there’s nothing in us that says that were we’re really pessimistic about the future or repeating something that we saw in the first quarter or the second quarter of ’09.”

“I think it’s kind of obvious right now that the mining companies, given the changes of the CEOs that are going on out there and then the real strong focus on productivity, that they’re looking to optimize the assets that they have rather than the expenses and that’s obviously feeding through into the kinds of CapEx that they’re following through within and that’s how we’re pursuing these pieces.”

“But there have been some segments in the marketplace such as coal mining and things where you would sell significant number of industrial motors that have been hit because of that industry being down, we are very much aware of that. But we see other areas like gas and different areas where it’s actually picked up.”

Raytheon 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“In the U.S., the debate surrounding near and long term resource allocation to national security is ongoing. Congress and the administration continue to work toward a compromise on the fiscal ’14 budget and are not there yet. Current versions of the budget don’t include sequestration, and barring some type of grand bargain, the defense budget ultimately will need to be reconciled with the cap spelled out in the Budget Control Act of 2011, which is about $50 billion lower than the currently proposed levels.

The outcome remains unclear, but as we’ve said all along, we remain focused on executing our strategy and managing the business in order to deliver the best value for our customers and shareholders, whatever the environment.”

“International continues to be a key driver of the business.”

“I can tell you that Raytheon will be making a shift in how we look at our international business because 30% will happen and we’ll be prepared for it. And then as we get to that milestone, we’ll be thinking about 35% because you got to think in increments to go do it.”

[analyst comment] “Northrop mentioned that the impact of higher rates had an adverse impact on their return on assets [in their pension plan] year to date. They were only up 50 bps through the end of June.”

” For us, I would say more than on a year to date basis, but as of just a couple of days ago, we were just under 8% return on assets.” [in the pension plan]

Etrade 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“I joined E*TRADE a little over 6 months ago, and I faced each day with more enthusiasm for this company and the opportunities that lie ahead of us.”

“I have completed the buildout of my executive committee, adding some serious fire power this quarter. ”

“brought on a new Chief Marketing Officer”

“we have decided to exit our market making unit, G1X, a conclusion reached in light of the tightening economics for that business, coupled with a potential associated risk, both operational and regulatory, and most importantly, because it is not core to our retail customer business.”

“Well I think we’re still in the beginning of having Liza develop her plan both internally and with her external agencies. And I think you’re going to have to stay tune to find out what that is. I suggest that it’s likely to tick up a bit. But I think what’s most important is not only what you see us doing outside, but what we’re doing to do a better job representing good value and good opportunities to our client base. So some of the marketing you won’t see going outside. You’ll see it direct to the existing customers and that’s — we think that’s an attractive way to drive more money to the bottom line for our shareholders.”

Monopoly: Internet Edition

Looking at the top 25 US websites by traffic, it’s interesting to note that the world of internet real estate may not be quite as big as you’d think, and a few key players control a lot of the beach front property.  $GOOG, for instance, not only owns the #1 internet property in the US (Google.com) it also owns the #3 (Youtube) and the #13 (Blogspot) properties.  $FB owns #2 and #23, while $YHOO lays claim to #4 and #18 thanks to its recent acquisition of Tumblr.

If Facebook’s strong quarter is an indication that brand advertisers are ready to commit significant dollars to internet buys, the property frenzy could be in earlier innings than we recognize:  there’s gold in them thar hills.

Note: internet properties may not qualify for REIT status, Yet…

 

Major Web Property Owners

 

Source: Alexa.com US Site Rankings

Facebook 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“soon we’ll have more revenue on mobile than on desktop”

“according to third-party metrics like comScore and Nielsen, Facebook share of time spent in the U.S. is either steady or increasing.”

“There has been a lot of speculation reporting that fewer teens are using Facebook. But based on our data, that just isn’t true”

“Right now ads on average make up about 5% or 1 in 20 stories in News Feed. We haven’t measured a meaningful drop in satisfaction when we ask people about their experience with Facebook.”

“Our advertising business gained significant momentum this quarter growing 61% year-over-year to 1.6 billion. Our mobile ad revenue grew significantly as well and is now approximately 41% of total ad revenue, up from about 30% in Q1”

“Direct response marketers, including ecommerce companies, increased their spent significantly. Year-over-year ad revenue from ecommerce companies doubled in the second quarter. Direct response marketers are taking advantage of our high click-through rates and competitive CTCs to grow their businesses. These marketers are typically very measurement focused and they quickly increased their budgets as we deliver compelling ROI.”

“Local businesses also grew spend significantly. We surpassed 1 million active advertisers this quarter, more than double the number we had only a year ago.”

“finally, brand marketers also continue to grow spend. We have a massive and engaged audience around the world that brands can use to build awareness and drive scales. Every night 88 million to 100 million people are actively using Facebook during primetime TV hours in United States alone.”

“As Facebook delivers personalized experiences to over 1.1 billion people, we also have a unique opportunity to deliver a more personalized advertising experience.”

“On an average day in June, 699 million people used Facebook, up 27% from last year. This represents 61% of the 1.15 billion people who accessed Facebook at any point during the month of June.”

“Instagram continues to grow rapidly with impressive engagement and we announced last month we had over 130 million actives using the service”

“In Q2, total revenue was $1.81 billion up 53% or 54% when adjusted for constant exchange rates.”

“ARPU increased 25% compared to last year to $1.60 per user for the quarter including a 35% increase in the United States and Canada as well as 30 plus percent gains in all our other regions.”

“we expect 2013 CapEx to be in the neighborhood of $1.6 billion. ”

“what takes an ad and makes it a good ad is whether it’s relevant to you.”

“The most important work we’ve done over the past year and I think you’re seeing its results and it is around Custom Audience”

“I think as you think about different industries using the power of online marketing, we see different levels of adoption but I’m a believer that over time this is where people are spending their time and any marketer who’s trying to reach people is going to spend their resources there as well.”

“We are expanding both our direct selling efforts both to sales teams and online as well as the third parties we work with, and we think having a healthy and growing ecosystem on both sides is really good for the development of our business.”

“ur plan will continue to be to invest aggressively in the areas that we think are important to improve our strategic positioning and to drive our ability to grow revenues and profits over the long run.”

“I think when people talk about impression-based purchasing or buying, what they’re really trying to get at is brands…When you think about what brand spenders are doing, they’re trying to get discovery”

“describe for you the variables that influence what CapEx requirements are for the company. So clearly the number of users is near the top of the list, and also the time at which the users use the service. So adding users who are off peak — the Facebook peak provides less of a burden for our infrastructure than people who are using at the same time as our peak hours, because we can leverage what we built to peak. A second thing is definitely the level of engagement with those users and that seem to be where you were going with your question about video. That is and will continue to be, we hope something that drives up requirements for our infrastructure because it means people are really engaging and finding new ways to use the service. What has helped us I think is the two variables that come next. One is just the cost of the equipment itself and the datacenters and over time Moore’s Law and other things and competition in the market have helped us to really be able to bring down the cost for each unit of equipment we use. And then the next variable which I mentioned in my remarks which I think is a really important one is just the efficiency of what we build. So over time I think Facebook has impressively succeeded at making the hardware we use more efficient and the software that we run on it more efficient in terms of how much compute power that is needs. The last variable of course probably the hardest to predict is product development, is just what we build and how that influences what the computer requirements are.”