Facebook CEO Mark Zuckerberg
Source: http://static.progressivemediagroup.com/uploads/imagelibrary/X-20121004145237687.jpg
It’s widely known that Facebook’s initial public offering in the stock market wasn’t spectacular. The stock price has dropped a significant amount, from $38 to closing at $20.91 on October 5, 2012. Its lack of success in the stock market doesn’t mean that its social networking platform hasn’t experienced success. Facebook recently reached the major milestone of having one billion users registered. This is a huge deal for CEO Mark Zuckerberg, who describes it as “by far the thing [he is] most proud of in [his] life.” However, the big question still remains: how will Facebook make more money off of its 1 billion users?
The question of how the company expects to extract revenue from its customers is what has driven the price of their stock down. The increasing move from desktop to mobile makes it harder to sell advertising space on the social networking site. If Facebook continues to do things without looking at the future and how they can get money out of their users, its stock will definitely continue its fall. The company’s going to have to make some strategical decisions if it wants to see its stock price make it back to its IPO price.
Link to article:
http://www.cbc.ca/news/technology/story/2012/10/04/facebook-billion-users.html
Hey Tanvir, I read an article with similar concerns about FB’s new ventures. I think it’s ironic to consider that the next step which might make them gain more users – mobile device applications- also may result in a major loss of profit. I think it’s crucial to spend the next few months looking at the value of their stocks and seeing if any progress is made before we can officially conclude if FB is on the decline or rise.
Hi Tanvir!
The problem with mobile advertising is the significant compromise of the user experience. Facebook is also currently venturing into new territory, with the implementation of its new Amazon-like gift service. I responded to your post on my own blog, which can be found here: http://www.blogs.ubc.ca/alyssasblog