Mark Zuckerberg has created a seemingly perfect home on the Web, one where people feel comfortable chatting with friends, playing games, sharing photos and videos, listening to music and revealing the most intimate details of their lives. The $100 billion question is whether Facebook will be a perfect home for advertisers, as well. Facebook, the social networking giant, is on the cusp of an initial public offering that is shaping up to be a success. There has been such an investor frenzy that the company supersized its offering on Wednesday. It now plans to sell nearly 18 percent of the company to the public - up from around 14 percent - in an IPO that could value the company at more than $100 billion. Despite the overwhelming level of interest, Facebook is facing fresh concerns over its ability to attract enough advertising revenue to justify that stratospheric valuation. On Tuesday, General Motors, the third-largest advertiser in the country, shut down its Facebook budget, about $10 million, saying that those ads were simply not doing enough to sell automobiles. For Facebook, the loss of $10 million is not a big deal. The company generated $3.7 billion of revenue last year, 85 percent from advertising. But the loss underlines the company's need to convince a skeptical Madison Avenue that Facebook pages are the perfect vehicle for marketers and to convince eager investors that it can increase its advertising revenue, and quickly. "It's one of the most powerful branding mechanisms in the world, but it's not an advertising mechanism," said Martin Sorrell, chief executive of WPP, the giant advertising agency. GM aside, many companies remain committed to the social media platform as a way to engage and connect with consumers. Advertising executives, industry analysts and institutional investors just aren't convinced that activity will translate into huge and growing profits for Facebook. It is a concern shared by some of the company's bankers, according to people with knowledge of the matter.
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Facebook denies hiring PR firm to spread fake info targeting criticsMaintained and developed by Arabs Today Group SAL.
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Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
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