In fact, as with Apple's (AAPL) iPhone 5 launch, Facebook may face the challenge of meeting user demand for its products as it rolls out new ways to advertise on the network.
The bull case on Facebook has long centered on the network's still unquantifiable earnings prospects and its growing popularity, but investors should also take stock of obvious risks to the company's share prices through year-end. In particular, Facebook faces a lockup expiration, where $1.2 billion of shares -- 700 million shares in total - could hit the stock market in the next three months, noted William Bird of Lazard Capital Markets.
Meanwhile, economic weakness in Europe and a muddled picture on fees paid by social gaming giant Zynga (ZNGA - Get Report) are obvious risks headed into the quarter. In October, Zynga badly missed earnings and cut guidance for the second consecutive quarter.In September, TheStreet noted that political election year ad spending may be one of the biggest positive surprises for the earnings of publicly traded media companies through 2012. With social media now firmly in the business of selling political ads, one of the more intriguing contests of this election cycle may be whether record ad spending helps to reinforce the business models social networks like Facebook, Pandora (P - Get Report) and Twitter. It's the first election season during which social media giants are making their pitch for a bigger share of the political dollars that typically go to established Web players like Google (GOOG) and Yahoo! (YHOO), as well as broadcast giants like Time Warner (TWX), CBS (CBS) and Disney (DIS). Some analysts expect ad spending this election cycle to add meaningful third- and fourth-quarter revenue for Facebook and Pandora. Arguably even more important than a prospective earnings boost will be whether the social media giants prove their respective business models work in generating ad dollars as investors demand a clearer picture on platform monetization. Michael Pachter, a managing director of research at Wedbush Securities, gave TheStreet a back of the envelope calculation that social networks may see an election cycle revenue boost of more than $100 million in the second half of 2012.
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