Facebook (FB) Dips Despite Instagram's $100M Omnicom (OMC) Deal

NEW YORK (TheStreet) -- Facebook  (FB) was dipping 1.54% to $69.75 at 2:39 p.m. on Friday despite the news that Instagram, which Facebook bought for $750 million in 2012, had reached a $100 million deal with Omnicom Group OMC.

Advertising Age reported that the two sides had reached a deal to allow Omnicom-represented brands to show advertisements on Instagram users' feeds. The two sides confirmed the partnership, Instagram's first with a major ad agency, but would not disclose the terms of the deal. Instagram noted in a statement the deal would not alter its advertising strategy and that the ads would be consistent with the user-generated content on the service.

According to the report, a given ad in a user's stream would be controlled so that it remains for an extended period of time (one executive said more than a day) even if the user logs out and in again. 

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TheStreet Ratings team rates FACEBOOK INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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