Facebook, Inc. FB it seems is mulling over the idea of having a data center in Taiwan in a bid to enhance its focus on the growing Asia Pacific market. Per a Reuters report, the company is considering an investment of $300 million (that is 10 billion Taiwanese dollars).
It seems that the company has already initiated talks with regional officials. According to the Magistrate of Changhua County (located in central Taiwan), Wei Ming-ku, “We've made all-out efforts to ensure sufficient supply of water and electricity … We hope they will come."
Ming-ku stated that the center will likely be built on a 6 acre plot, which, however can be expanded to 20 acres going ahead, in accordance with the company’s requirements. However, Facebook hasn’t divulged its plans yet.
Nonetheless, we believe that given the fact that the Asia Pacific market is becoming increasingly important for this social media giant, a data center in the region does seem a possibility.
Last quarter, the Asia Pacific was among the strongest-growing markets for the company (ad revenue growth of 48%) only behind North America. Moreover, this growth is likely to continue as there is still a lot of untapped potential in these markets owing to the massive population and low Internet penetration.
Facebook, in order to position itself well, has already taken a host of strategic initiatives specifically for these markets (remember Internet.org program and Facebook Lite app). We believe that a data center in the region is the next most logical step as storage infrastructure is necessary to complement its growing user base.
In fact, Facebook is not the only company thinking on these lines. Its closest competitor in the advertisement market, Alphabet’s GOOGL Google has already established a data center in Changhua County.
As of now, Facebook has five data centers in all, out of which four are in the U.S. and one in Sweden.
Facebook carries a Zacks Rank #2 (Buy). A couple of other tech stocks worth considering include MeetMe, Inc. MEET and Synacor, Inc. SYNC, both sporting a Zacks Rank #1 (Strong Buy).
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