Facebook Stock: The Two Things I Want to Hear From Mark Zuckerberg on January 28

By Markets Fool.com

Despite posting a stellar 2014 nearly across the board, Facebook CEO Mark Zuckerberg needs to announce more of the same during his pending Q4 and yearly earnings call in a couple of weeks. In a world of "what have you done for me lately," Facebook investors have every right to demand continued growth -- and they're likely going to get it.

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But the primary question as we head into a new year is what cards does Zuckerberg have up his sleeve to keep the Facebook ball rolling? While ending 2014 on a high note will be nice, outlining some specifics regarding future growth drivers will be key.

The upside for Facebook is that, with multiple acquisitions under its belt and strong performance of its core platform, there's no shortage of growth alternatives. But to really kick 2015 into high gear, it's time Zuckerberg announces he's taking the wraps off two explosive growth drivers that, until now, have been on the sidelines.

It's time for Instagram
It was about this time last month Facebook caused a stir when it announced its Instagram platform had topped 300 million monthly average users (MAUs). Much of the grumbling came from the Twitter camp with its 284 million MAUs, including the now infamous rant from co-founder Evan Williams in which he slammed both Facebook and Instagram in no uncertain terms.

Williams' angst seemed to be borne out of frustration, in that Twitter continues to battle MAU growth and user engagement challenges, even as Facebook properties like Instagram and WhatsApp are growing by leaps and bounds. Remember, Instagram was sitting on a "mere" 200 million MAUs early in 2014. Instagram's MAU growth should have investors feeling good, except for one thing -- Zuckerberg has yet to unleash full-fledged advertising across the site.

Sure, Instagram isn't entirely ad free; but it's just scratching the surface of what one analyst suggests is a $35 billion business.That estimate is based on future earnings, so some may take that with a grain of salt; but the analyst's prediction that Instagram could generate $2.7 billion in revenue this year is warranted. Why?

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As it stands, Facebook has generated approximately $11 billion in revenue during the past four quarters. Considering Facebook's 1.35 billion MAUs, that equates to a little more than $8 in revenue per user. Applying that same revenue-per-user formula to Instagram's 300 million -- and growing -- MAUs equates, to about $2.5 billion in incremental ad sales annually, not far from analyst estimates. Of course, that's assuming that Zuckerberg gives the nod to go all in, and that advertisers valueInstagram the way they value Facebook. But even if advertisers aren't will to cough up Facebook-like ad fees initially for Instagram, there's no denying its revenue potential.

Bring on the video
Similar to holding back advertising on Instagram, Facebook also has waited to introduce video ads across its properties. There's a reason investors were less-than-enamored with Zuckerberg and Facebook COO Sheryl Sandberg last year when the two announced that neither Instagram nor auto-play video spots would add appreciably to revenues in 2014. Video has the potential to push Facebook revenues through the roof, as evidenced by its recent trial runs.

Not only was Facebook picky about which marketing partners it would "allow" to test video ads on its site, it charged them a reported $1 million a day just for the privilege. Facebook is well-known for its target marketing capabilities -- showing the right spot to the right person at the right time. That's a given.

But based on reams of data, video is also far and away consumers' ad medium of choice, particularly for smartphone users. This is just fine by Facebook, because 1.12 billion of its 1.35 billion MAUs are mobile. It's no wonder Facebook's advertising partners will pony up so much for a video ad, which is why it's time to roll them out to the marketing masses.

We'll find out if Facebook has continued its remarkable run on Jan 28; the only surprise would be if it hasn't. But even more critical for future growth is to hear Zuckerberg utter the magic words that the time has come to take the training wheels off Instagram, and incorporate video ads across the board. If he makes that clear in a couple weeks, Facebook shareholders should enjoy yet another stellar year.

The article Facebook Stock: The Two Things I Want to Hear From Mark Zuckerberg on January 28 originally appeared on Fool.com.

Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.