Huge shock was created when Facebook’s stock price fell by half of its initial price (from $38 to $18.75). It is reported that the company lost about $10 billion of the company’s market value at that time. However, the most astonished point was that Facebook was once valued at $100 share when it came to its IPO, which was more than the combined worth of Nike and Golden Sachs. It is ridiculous that a social media company was valued higher than the world’s biggest sports outfits producer.

Similarly, Twitter’s IPO was dined because the highly-evaluated share price of it in term of which category the company belonged to. The revenue stream of Facebook and Twitter both come from large amount of web advertisement. The advantage of online ads is that it is widely seen by tremendous number of people. The drawback is that the revenue is uncertain because not all the companies are willing to pay such a price (usually very expensive) to put their ads on the Internet. They may realize that people get annoyed by thousands pieces of ads in the Internet when they try to focus on their work; since these advertisements are annoying, people tend to pay less attention on them, and thus, they are not that efficient compared with the actual ads on magazines and TVs.

Twitter’s failure on its IPO suggested the company should reevaluate its real value and come up with a more reliable and efficient revenue source.