Topeka Capital Mulls What Facebook (FB) Might be Planning at Its 'Special Event'

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Topeka Capital is out with a few comments on Buy-rated Facebook (Nasdaq: FB) following the social network giant's announcement of a special even coming up next week.

Analyst Victor Anthony mulled a few possibilities:

• Could it be an integration with phone carriers? - Anthony notes that Facebook has a phone team in-house, but that CEO Mark Zuckerberg has stated recently that building a go-along smartphone was the wrong strategy for the company.
  
  Should Facebook be forming a deeper relationship with wireless companies, Anthony explained that Facebook, "have social functions built into the phones, and receive a revenue share of the monthly user payments (we are thinking out of the box here)."
  
  
• Video ad product? - There has been testing and Facebook could launch something that integrates with the current News Feed format. Anthony comments, "This makes sense as users are already posting videos in their newsfeeds and won't object to a video ad. Online video advertising was estimated by eMarketer to be a $2.9B industry in the U.S., growing at a 29% CAGR to $8 billion in 2016."
  
  
• Expanded 'Gifts' product? - Anthony likes the 'Gifts' platform as a stepping-stone into a broader, more robust e-commerce platform. No specific comments were made on this idea.
  
  
• A social search engine? - Anthony believes that a Social Search Engine might be worth about $7 to $8 per share for Facebook. He is not entirely sure a whole press event would need to be dedicated to something that Zuckerberg has already stated Facebook is developing.
  
  Anthony noted that, "At full ramp, we see Facebook generating close to $5 billion in annual revenues and $2.5 billion in EBITDA from a search engine."
  
  
• A formal launch of Ad Exchange? - Anthony simply noted that Ad Exchange would be a big catalyst for Facebook in 2013.

Topeka reiterates its Buy rating and $36 price target on Facebook.

For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.

Shares of Facebook closed at $29.06 yesterday, with a 52 week range of $17.55-$42.99.

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