NEW YORK (TheStreet) -- Facebook's (FB) - Get Report drive to dominate online advertising hit a speed bump last week after reports emerged that it had overestimated the average time its users spent watching videos between 60% and 80%.
The news rankled publishers and advertisers, both of which view Facebook as a critical platform.
Michael Kassan - CEO of marketing advisory firm Medialink - doesn't think that the revelation will trigger a decline in advertising on the social network.
"This is one metric that Facebook utilizes on a dashboard of about 14 other metrics," he told CNBC on the network's "Squawk Alley" Monday. "What we've been told by the leaders at Facebook, this metric particularly doesn't impact return on investment or billing, but nonetheless, it's important."
Facebook and Alphabet (GOOGL) are the two heaviest hitters in the current online advertising landscape. Facebook's decision to not immediately confront the problem full-on when it was notified of the erroneous metric in August does not reflect well on the company, Kassan argued. Facebook publicly apologized for the error on Friday.
"What is unfortunate for Facebook in this context is it's being lumped into a transparency conversation," he said. "And so advertisers are saying: 'Is this yet another example of a lack of transparency from the people we trust and deal with?'"
Shares of Facebook were slightly lower in Monday morning trading.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate FACEBOOK INC as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: FB