NEW YORK ( Real Money) -- Tuesday's news that General Motors ( GM) is cutting ad spending on Facebook ( FB) was a huge shock to most casual investors. The concern among Facebook skeptics is whether GM is the canary in the coalmine leading other big ad spenders follow suit. Facebook has tried to spin this development by countering:
- GM was only spending $10 million a year.
- Ford (F) is happy with its return on investment, so GM must be doing something wrong.
- The timing of the leak to the Wall Street Journal implies it's coming from someone trying to embarrass Facebook.
- It's still early for ads. Facebook is not even trying and posted $3.7 billion in revenue last year. Imagine what it can do when it gets its act together.