Posts Tagged ‘Facebook IPO’

Newsmakers 2012: Is Mark Zuckerberg a visionary or a villain?

By Chris Sorensen - Wednesday, November 28, 2012 - 0 Comments

As Chris Sorensen reports, it depends on who you ask

Mark Zuckerberg

Mark Zuckerberg, the creator and CEO of Facebook, has never been an easy guy to like. The 28-year-old social-media magnate comes across as distant and unfeeling and is prone to awkward pauses. He’s no friend of privacy advocates, who fret about the vast sea of personal information that more than a billion Facebook users have uploaded, and is criticized by users themselves for changing the rules about how data is shared. Zuckerberg was even accused of stealing the Facebook concept itself, as anyone who watched the 2010 film The Social Network knows.

So it comes as little surprise that Zuckerberg would irritate investors, too. Facebook’s initial public offering this spring was not only billed as the biggest tech IPO since Google’s in 2004, but stood as a testament to how much social media has changed (some might say invaded) our lives. It was also viewed as a test of Wall Street’s ability to create and spread around massive amounts of wealth. Some even argued that, by convincing ordinary investors to put money back into the stock market, Facebook and its hoodie-clad creator could revive the ailing U.S. economy.

Click here for the interactive cover of the Newsmakers 2012 issue.

The result, given the hype, wasn’t pretty. On May 18, Facebook’s stock began trading at the IPO’s offer price of $38. A few minutes later it climbed above $40 as the masses rushed in, and then promptly sank like a stone—with an anchor tied to it. The shares eventually bottomed out at around $17.55 about three months later, wiping out more than $50 billion in value. And it wasn’t long before angry investors were looking for someone to blame. Continue…

  • Facebook: like it, or not

    By Chris Sorensen - Tuesday, November 27, 2012 at 2:24 PM - 0 Comments

    In efforts to boost advertising revenue, the social networking site finds itself alienating many of the people it needs most

    Steven Senne/AP Photo/The Canadian Press

    Facebook’s latest tweak drew a predictably negative response from users. The popular social networking site now automatically creates a “couple’s page” for any two users who declare themselves in a relationship with one another. Facebook includes relevant photos, status updates and back-and-forth conversations. It’s all information users have already agreed to share, but in a new and sappier context. Critics described the move using words like “retch,” “cringeworthy” and “way off the mark.”

    It’s become a familiar dance: each time Facebook launches a new feature or changes an existing one, users complain it’s not what they signed up for. And now, eight years after Mark Zuckerberg created the site in his Harvard dorm room, deep-pocketed advertisers are also learning how it feels to be subjected to Facebook’s tinkering. Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team, recently took issue with Facebook’s efforts to suddenly charge the team thousands of dollars to reach fans of the Mavericks’ Facebook page. “FB is blowing it? This is the first step,” Cuban wrote in a post on Twitter, threatening a boycott. “The Mavs are considering moving to Tumblr or MySpace as primary site.”

    The high-profile criticism comes at a time when Facebook needs paying customers like Cuban more than ever. With its stock still trading nearly 40 per cent below last spring’s IPO price of $38 (it has been as low as $17.55), investors are searching for evidence that Facebook will live up to its promise of being an unparalleled online money-maker. A key concern has been the growing number of users who access the site from their smartphones or tablets, where Facebook has historically had no room to place advertising because of the small screen sizes. Continue…

  • Facebook 3rd-quarter results show mobile advertising inroads, stock surges after-hours

    By The Associated Press - Tuesday, October 23, 2012 at 10:26 PM - 0 Comments

    NEW YORK, N.Y. – Facebook finally has proof that it can make money from…

    NEW YORK, N.Y. – Facebook finally has proof that it can make money from mobile advertising.

    As part of Tuesday’s third-quarter results, the world’s biggest social media company disclosed for the first time that some 14 per cent of its ad revenue came from mobile advertising. It started showing ads to users who access Facebook from their phones and tablet computers about six months ago.

    Since before the company’s initial public offering in May, investors have worried that Facebook isn’t taking advantage of its growing mobile user base.

    “I want to dispel this myth that Facebook can’t make money on mobile,” said CEO Mark Zuckerberg in a conference call with analysts. “This may have seemed true earlier this year because we hadn’t started trying yet.”

    Tuesday’s quarterly financial report —Facebook’s second as a public company— sent its stock up $2.53, or 13 per cent, to $22.03 in after-hours trading. Facebook had closed up 18 cents at $19.50 in regular trading on a day that saw the Dow Jones Industrial Average drop 243 points, or 1.8 per cent.

    Facebook Inc. posted a loss of $59 million, or 2 cents per share, in the July-September period. That’s down from earnings of $227 million, or 10 cents per share a year ago, when Facebook was still privately held.

    Excluding special items, mainly related stock compensation expenses, Facebook Inc. earned $311 million, or 12 cents per share, in the latest quarter, a penny better than what analysts were expecting.

    Revenue rose 32 per cent to $1.26 billion from $954 million. That’s also higher than the $1.23 billion that analysts polled by FactSet had expected.

    Facebook’s monthly user base grew 26 per cent from a year earlier, to 1.01 billion. Some 60 per cent of users access Facebook using a mobile device, the company said. At the end of the second quarter, less than 57 per cent of its then-955 million users came from mobile devices.

    “People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform,” Zuckerberg said. “At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company.”

    Advertising revenue was $1.09 billion, up 36 per cent from a year earlier. It represented about 86 per cent of Facebook’s total revenue. In the second quarter, Facebook’s ad revenue grew at a slower pace — 28 per cent from a year earlier, to $992 million. Baird analyst Colin Sebastian said that besides the mobile progress, the acceleration of ad revenue was a big reason for Facebook’s stock price jump.

    “There was some debate that they’d be able to pull that off,” he said.

    Revenue from payments and other fees climbed 13 per cent to $176 million. The figure includes Facebook’s cut from the virtual items people buy for games they pay on the site. Facebook said that while payments from Zynga Inc. declined, its overall games ecosystem has become more diverse. In recent quarters Facebook has derived as much as 12 per cent of its revenue from “FarmVille” maker Zynga Inc., but Zynga has been experiencing a slowdown. Zynga said Tuesday that it is laying off about 5 per cent of its workforce of 3,000 people.

    Facebook did not provide guidance for the current quarter or beyond, a practice it has maintained since its first earnings report as a public company in late July.

    Facebook’s stock has been trading at roughly half of its initial public offering price of $38. The May 18 IPO was one of the most highly anticipated offerings in recent years, but the excitement quickly deflated — in part due to concerns about Facebook’s ability to grow mobile ad revenue. The stock has not traded above its IPO price since its first trading day.

    Though investors took it as a good sign, Sebastian called Facebook’s mobile progress incremental.

    “They have a lot of work to do,” he said.

    Facebook’s challenges include ensuring that users are not overwhelmed by mobile ads bombarding their smaller phone and tablet screens. Chief Operating officer Sheryl Sandberg said the company monitors user engagement to make sure this doesn’t happen.

    As Facebook’s user growth inevitably plateaus, the company will also have to grow the money it makes from each user, Sebastian said, adding that Facebook is on the right path as it experiments with new ad formats and products.

  • Facebook’s stock has never been lower (with me)

    By Jesse Brown - Tuesday, May 22, 2012 at 12:48 PM - 0 Comments

    Sean MacEntee/Flickr

    Facebook is worth less and less to me.  No, I didn’t buy any stock–I speak only of the site’s value to me as a user. It’s tanking.

    Like everyone else on Facebook, I’ve always been ambivalent about Facebook. The shameless FB addict, gleefully abandoning any notion of privacy as they sext, post and poke, is mostly a media creation. The Pew Research Center studied teenagers and found that they actually care deeply about their privacy online–who sees what is a big concern. They just don’t understand how to control their Facebook privacy, and neither do I. Between Facebook’s ever-changing and ever-expanding Privacy Policy and the constant addition of new and conflicting features, I’ve lost the plot. I don’t know who will see the things I post any more than I know a “group” from a “page” or a “list” from a “subscription.” I’m in the dark, and I wonder if Facebook likes it that way. For years, the site grew more and more complicated as it got more and more popular. Whatever impulses I had to abandon it were overruled by the sheer necessity of using it.

    Continue…

  • Facebook IPO: A roundup of notable quirky news

    By Erica Alini - Friday, May 18, 2012 at 4:49 PM - 0 Comments

    Facebook/AP Photo

    All talk of bubble, fizzle, and Nasdaq glitches aside, the Facebook IPO has generated some truly entertaining news in the past few weeks. Here’s a roundup of the quirky items you might have missed:

    “Mark Zuckerberg does what Mark Zuckerberg wants.” David Benoit of the Deal Journal blog at the Wall Street Journal anticipated on Monday: ”The CEO of Facebook, and birthday boy, doesn’t put on a suit just to impress the Wall Street suits that are about to make him a multi-billionaire and he doesn’t leave sunny California just to come ring some silly bell out of some symbolism. He’ll ring a bell, but he’ll do it from the comforts of his own HQ.”

    And so it was.

    • Besides Silicon Valley geeks and Wall Street types, California divorce lawyers and wedding planners were also salivating over the IPO, April Dembosky, of the Financial Times reports:

    “Divorce lawyers and wedding planners have been gearing up for the Facebook IPO, waiting for the influx of wealth in Silicon Valley to stir up drama in romantic relationships, for better and for worse.

    ‘When Google went public, there was a wave of divorces. When Cisco went public there was a wave of divorces,’ says Steve Cone, a divorce attorney based in Palo Alto, near the social network’s Menlo Park headquarters. “I expect a similar wave shortly after Facebook goes public.’ ”

    • Luckily, some of the gravy is supposed to trickle down all the way to the 99 per cent–or at least the ones who are California taxpayers–according to The Economist:

    “Jason Sisney of the non-partisan Legislative Analyst’s Office says that the state seems to be facing an overall budget ‘problem’ of more than $9 billion this year and next.

    Enter Facebook (see article). The details are not yet known—at what price the shares list, how many Facebookers cash out, and so forth. But back-of-the-envelope calculations by Mr Sisney suggest that California might get a windfall of $2 billion over the current and coming fiscal years, and possibly billions more if the shares trade well.”

    • The one per cent, meanwhile, was allegedly getting organized to minimize that trickle-down, as Bloomberg reported of Facebook co-founder Eduardo Saverin:

    “Saverin, 30, joins a growing number of people giving up U.S. citizenship ahead of a possible increase in tax rates for top earners. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dormitory and stand to reap billions of dollars after the world’s largest social network holds its IPO.”

    And a couple of senators immediately seized a golden opportunity to ride a wave of popular rage:

    “Now two U.S. senators want to make sure he never sets foot in the U.S. again unless he pays tens of millions of dollars in taxes he will owe after the company’s initial public offering Friday… Sens. Charles E.Schumer (D-N.Y.) and Bob Casey (D-Pa.) denounced him Thursday as a tax dodger and introduced legislation to punish anyone who gives up citizenship to duck big tax bills.”

    Saverin is now insisting he just really likes Singapore:

    “The social media entrepreneur and investor said in a statement, emailed to Reuters by a spokesman, that his decision to move to Singapore was “based solely on my interest in working and living” there. Saverin said he has been there since 2009.”

    Okie dokie.

    • And in one last piece of worthy news, the IPO might help Bono beat out Paul McCartney as the world’s richest musicians. Read more on Business Insider.

  • Facebook’s secret? Rolling with the punches

    By Peter Nowak - Thursday, May 17, 2012 at 12:35 PM - 0 Comments

    Background: Sylvester Stallone raising a glove during filming for Rocky Balboa. (Isaac Brekken/AP Photo). Layer: Mark Zuckerberg. (Brian Snyder/Reuters).

    If Facebook were a fictional movie character, it would have to be Rocky Balboa. Like Sylvester Stallone’s underdog boxer, Facebook routinely gets its figurative face punched in, but somehow keeps on going. Whatever you think of the social-networking service, on the eve of its initial public offering–expected to be the largest ever for a U.S. tech company–it’s hard not to admire the company’s ability to roll with the punches.

    Facebook has repeatedly sparred with watchdogs and users alike over its constantly changing privacy settings. Canada actually led the way, with Privacy Commissioner Jennifer Stoddart giving the web service a good spanking back in 2009, with other countries following suit. Even before that, the company caught heavy flak for its Beacon effort, an ad platform that displayed on Facebook users’ activity on other websites.

    Continue…

From Macleans