Facebook’s IPO prospectus confirms that the social network is an internet colossus, with 845 million users worldwide and $3.7 billion in revenue in 2011

Growth potential in display advertising, which accounts for the majority of revenue, seems limited with increasing mobile substitution in major ad markets and future user expansion largely in lower yielding countries

There is significant potential to increase income from payments and other businesses beyond social games, but the company’s strategy is unknown at this point

VMed’s Q4 results were again mixed, with underlying cash flow growth hit by high capital expenditure primarily relating to accelerating TiVo box installations

But this strong take up of next generation TV, and real progress at the Mobile and Business divisions, give us confidence that the company’s strategy is working

Management guidance of further cash flow growth from the second half of 2012 is credible, though we continue to expect underlying growth to be limited

BT’s results for the December quarter saw continuing trends of gradual improvement at BT Retail and efficient deployment of next generation access at Openreach, plus strong control of unallocated property costs, enabling management to issue slightly improved group-level guidance for the current financial year to March

Cash flow growth at group level continued to be compromised by the cost of overseas expansion at Global Services and a continuing shift to LLU and IP-based services at BT Wholesale

Improved guidance suggests that progress at Retail and Openreach is sufficiently strong to generate positive, if modest growth in cash flow at group level, despite the slower pace of improvement at other divisions and a challenging economic environment

Google’s UK revenue grew 23% to £676 million in Q4 2011, taking 2011 revenue to £2,525 million, up 20% year-on-year, 2 ppts below our November estimate

Globally, gross revenue rose 25% year-on-year, with mobile and display performing strongly, but rising costs pulled net revenue growth down to 8%

Our growth forecasts for Google’s UK revenue remain unchanged; we expect UK internet ad spend to rise from £4.7 billion last year to £5.8 billion by 2013, representing 35% of total advertising, as print continues to fall

The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT

Unlike in the US, Netflix’s UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free

The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US

Virgin Media’s plan to double the line speed of most of its broadband customers is the latest in a series of moves to retain its position as the leading high speed internet service provider in the face of BT’s deployment of next generation access (NGA)

The move presages further price increases and an upgrade to offers for new cable customers, but is in the first instance about retaining the large existing base of cable customers currently on 10 Mbit/s

The £150 million or so of incremental capex required is small in the context of NGA, but the impact both on cable churn and demand for higher speeds across the wider market is by no means certain

Facebook is winning the battle for eyeballs and advertising in the internet display arena, with revenues projected to reach $5.3 billion in 2012

By comparison, we expect Google to achieve revenue of $2.5 billion, after traffic acquisition costs, though it remains the king of internet advertising, due to its dominance of search

Increasing advertiser demand for scale and performance will make many publishers increasingly reliant on one or both of the internet giants for audience and revenue growth

The spectacular growth of Netflix in the US has underlined the potential of online streaming subscription services offering films and other premium entertainment

As Netflix plans to enter the UK and Ireland in Q1 2012, its core US operations are in a critical phase of extremely rapid adoption, rising competition and escalating content costs, the successful outcome of which appears crucial to the international expansion of online streaming

The UK and Ireland possess features that make them an attractive first move into Europe; however, the competitive stakes are higher, while broadband download limits and traffic management present an added challenge – time will tell whether the UK and Ireland can sustain Netflix alongside LoveFilm and any other subscription online streamers

AOL, Microsoft and Yahoo! are partnering to cross sell non-guaranteed display inventory in the US, highlighting their need for scale in the face of increasing competition from Google and Facebook

Aggregating unreserved ads via their respective networks may boost share of ad budgets, but the focus on less valuable inventory means any impact is likely to be small

Short of extending the partnership to include all inventory and greater investment in technology there seems little the three companies can do to stop further erosion of display share, though revenues should continue to rise

Zoopla and The Digital Property Group, DMGT’s property portfolio which includes Findaproperty, Primelocation and Globrix, announced a merger on 14 October 2011. Under the terms of the proposed merger, DMGT would receive a 55% interest in the merged entity

A merged Zoopla and DPG will compete more effectively with market leader Rightmove, in a property market scaled down by one-third in terms of the number of transactions

We think the merger will give advertisers a better choice and constrain Rightmove’s pricing power, which has seen hefty fee increases on members, most recently in 2010, in 2011 and most recently again in November 2011