Facebook Facing Mobility Questions Following IPO
A public stock offering, a marriage to his long-time girlfriend, and questions and more questions. Those are just a few of the things Facebook CEO Mark Zuckerberg has been dealing with over the last month.
While Zuckerberg has had a lot on his plate of late, he is no doubt keeping his ears to the ground as to how Wall Street is viewing the now famous IPO. Analysts, in turn, are now speaking out as to how they view the public stock offering that has had the social media giant in the news for weeks now.
On June 27, a number of Wall Street analyst reports hit the streets, with many showing reserved optimism for the company’s IPO.
To return to where this all started, let us remember that on May 18, Facebook became the first U.S. business to debut with a market value of greater than $100 billion. Under securities law, the 33 banks that participated in the company’s IPO had to wait that long prior to publishing their thoughts.
Reports from leading financial institutions such as Morgan Stanley and Goldman Sachs seem overall upbeat regarding the long-term outlook for Facebook, given its approximately 900 million users. A large number of analysts also believe Facebook can snag a major piece of the Internet advertising market pie.
With that being said, it does not mean that there are not potential detours in the road for Zuckerberg and his baby if you will.
Some analysts and social media experts believe one of the biggest challenges to the company’s ability to grow over time is locating a growing source of revenue, particularly from the ever-increasing mobile sector.
According to analysts from BofA Merrill Lynch, “The company is in the midst of a mobile usage transition and we are cautious on Facebook’s revenue trends until new mobile ad revenue models start driving the top line.”
Facebook revealed the issue regarding mobile advertising in a Securities and Exchange Commission (SEC) filing. The document, called an S-1, or S-1/A when amended, mandates that a business provide investors with insights, including potential risks, of investing.
According to a story in The Wall Street Journal, the S-1/A filing included the following language: “If users increasingly access Facebook mobile products [...] and if we are unable to successfully implement monetization strategies [...] or if we incur excessive expenses [...] our financial performance and ability to grow revenue would be negatively affected.”
The bottom line is that you can bet Zuckerberg and Co. are heavily invested in thinking about how they can grow Facebook through mobile advertising going forward.
With money to spend, there is little doubt that Zuckerberg will open his wallet to the right purchase if it involves increasing his company’s ability to monetize mobile advertising.
And here you thought being a billionaire did not come with facing challenges along the way.
Photo credit: windows8update.com
Author Miguel Salcido has been an SEO professional for over 9 years, holding Director and VP positions at large agencies. Now he runs an organic SEO consulting agency and loves debating about SEO ranking factors so feel free to reach out to him for a lively debate.
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