The invasive nature of Facebook's advertising and now trending articles shows an alarming lack of appreciation for the implications of being too well-known among consumers and businesses and a surprising absence of deftness in managing its public image. When Facebook users hit the billion mark, maybe the company should play down the milestone rather than blaring the trumpets.
Missing the obvious: Though it was founded in 1889 and thought about nothing but photography for the next 100 years, once venerable Kodak somehow missed the digital photography revolution and now finds itself an historical artifact. Interestingly, one of the few assets the company has is patents, which it is trying to sell. Perhaps if the folks at Kodak had a little more appreciation for intellectual property early on, I'd be poking fun at someone else right now.
To me what's painfully obvious is that the world is going mobile, while Facebook seems stubbornly affixed to the desktop, unable to make meaningful inroads into mobility. To wit, Mary Meeker -- once the oracle of another dot-com era and now of venture capital firm Kleiner, Perkins, Caufield & Byers -- pointed out that since 2009, mobile app advertising has grown at a compound annual growth rate of 153%. Facebook has failed to meaningfully address this trend. Look no further that this final risk factor from the company's prospectus:
Well, at least it's there in black and white, and no investor can say they weren't warned. A famous anonymous phrase of the last Internet bubble was, "It's different this time," which was sage foresight at first, then, finally, the ultimate statement of hubris. I can say this much with confidence: It's absolutely no different this time.
Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.We had 488 million [monthly active users] who used Facebook mobile products in March 2012. While most of our mobile users also access Facebook through personal computers, we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook. We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012, we began to include sponsored stories in users' mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV