Posts tagged Facebook
Did you want SEO, analytics and Facebook ROI with that website? – Inside Tucson Business
May 18th
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Did you want SEO, analytics and Facebook ROI with that website?
Inside Tucson Business And why wasn't great Search Engine Optimization (SEO) included, SEO so powerful the new site showed up on page one of any key word search? The key to getting what you expect out of a new website, a remodel of an existing site, an email campaign, … |
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This Facebook Critic Is Rooting for Facebook on Friday
May 17th
On the eve of Facebook’s initial public offering, and two weeks after writing a five-part series that tried to answer the question of whether we’re in a social media bubble, the most striking thing to me is how divided people are on whether these astronomical values and this unlikely craze can be sustained.
Hundreds of tweets, comments, emails and more than the occasional accusations of being both a “Facebook naysayer” and “Facebook apologist” all at once leave me no closer to answering that question. But they do leave me with one important conclusion, no matter where you stand on the notion that we may or may not be in a social media bubble: We need Facebook’s IPO to work. We need what may be one of the biggest companies and biggest phenomena of our lifetimes to really be everything that those who don’t believe in the social media bubble say it is.
As someone who remembers the dot-com bubble (I was writing for Dow Jones at the time and got a front-row seat to the “irrational exuberance” Alan Greenspan warned us about) and believes we are overvaluing companies like Facebook, that’s hard for me to admit. But getting my pride dinged up would be worth not living through the catastrophe of what happens if Facebook’s IPO doesn’t live up to expectations.
Money Drives Dreams, Dreams Drive Innovation
This is what I wrote on the day Facebook filed its IPO, and this is what I still believe:
“Last year was marked by a string of disappointing IPOs in the social media sector – disappointments, in large part because those interests didn’t align as well as company executives had hoped… A successful Facebook IPO means some restored faith in the social media space. That means more capital and more incentive for the next Zuckerberg to come along and create something earthshaking instead of finishing a degree at Harvard.”
If Facebook raises $16 billion, as it hopes to tomorrow, it doesn’t just unleash a new string of Mark Zuckerbergs; it also unleashes a new string of Kevin Systroms who have great ideas, but no clear-cut way to monetize them. Zuckerberg may have been motivated by fear when he paid $1 billion for Instagram, but he bought it. And $16 billion can buy an awful lot of good ideas and fuel even more dreams.
But if it fails, naysayers like me get to say “We told you so,” and not much else. A chilling effect on the IPO market means less money flows from Wall Street to Silicon Valley. Fool us once, shame on the dot-commers who duped us more than a decade ago. Fool us twice, shame on everyone.
This Is a Story About Users
I’m going to leave predictions about where Facebook’s stock price will close on Friday to the sites that cater to investors. ReadWriteWeb is a site for people who use tech, and if we get too caught up in revenue projections, P/E ratios and and consensus analyst estimates, we miss what is important.
What is important is that if Zuckerberg remains true to his promise to not be driven by quarterly reports and share price, this ends up being a good thing for users. Yes, we will continue to complain about Facebook’s all-invasive service terms, and we will continue to hate on the world’s biggest social network. But most of us will continue to use it, if only because the people we need to keep in touch with need to use it.
By its sheer size, Facebook can generate enough revenue to keep moving forward as it has for the past eight years. As one analyst told me yesterday, if each of Facebook’s 500 million daily active users saw just one ad in their news feed each day, and Facebook collected two cents for that ad, the company would generate $3.5 billion in annual revenues.
Facebook can certainly do a lot more, and it hasn’t even tapped mobile revenue streams yet. Its growth may not live up to the pace that Wall Street investors want, but Zuckerberg has insisted he’s not going to be a slave to showing revenue growth each quarter. If he keeps that promise (and if the corporate structure he has selected gives him the power to keep it), users will, at the very least, not have to worry about shareholders or a board of directors messing up Facebook.
We may very well continue to bristle with every tweak and change Facebook makes to its design, and we may grow angry about privacy policy changes that serve to further erode privacy.
But at least we’ll know who to blame.
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Slower User Growth, Timeline Complaints Won’t Faze Facebook
May 17th
The Associated Press reports that millions of people are resisting pressure to sign up for Facebook, and a new study suggests that 93% of users “hate” the relatively new Timeline – with some even threatening to quit.
But before you call your broker and cancel your order in tomorrow’s initial public offering of Facebook shares, consider this: It doesn’t matter.
The slowing growth of user numbers and the fact that some people are holding out should not be surprising. At some point, Facebook will likely saturate all of the markets it enters, and without opening new markets like China, it will not see the rapid growth that marked its first eight years. And even as growth slows, Facebook still has about half of all Internet users signed up, and accounted for nearly one in 10 of all U.S. Internet visits last month.
The Timeline study by Attensity is more troubling at first glance. The company used its text analytics software to scan 138,572 Facebook posts about Timeline and found that 93% of them contained negative sentiment, ranging from “Timeline complaints” to the seemingly more damning “switch to another social network” and “will delete Facebook.”
Attensity did not give specific dates of when the study was conducted, saying only that the comments were analyzed over a six-week period that included March 31, when brands were required to switch over to Timeline. The study results also didn’t indicate whether users made good on their threats to leave Facebook.
That’s a crucial bit of information, because in the past Facebook has waited out initial criticism of changes; users eventually adopt and even embrace them. Indeed, when Facebook first started rolling out Timeline last fall, many complained about the loss of features that had been the target of complaints when Facebook did a major redesign in December 2010.
And even if people do quit, chance are good they will come back; by one estimate, as many as two-thirds of people who deactivate their Facebook accounts eventually rejoin the service.
The Attensity study, the Associated Press article and, frankly, this post are all doing the same thing: Taking advantage of the big buzz around Facebook’s IPO. But everyone knows Facebook is big and will remain big for the foreseeable future. The key, and the only story that really matters at this point, is whether Facebook can find a way to change those big user numbers into big revenue numbers.
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How To Buy Facebook Stock
May 17th
Facebook goes public tomorrow. It could be worth well over $100 billion dollars. Want to get a piece of that? It’s going to be very tricky for mere mortals to get Facebook stock in the IPO. If you want shares, here’s what you have to do.
- “First, get a ton of money. Like tons. I am talking gazillions.”
So says Peter Kupferberg, a principal at Chicago investment counseling firm Gofen and Glossberg. Most of the large online brokerage firms will at least take requests for Facebook shares, but they have rules. Some require existing balances of $500,000. Some will only consider people who already trade 30 times a day. Some even decide whether you’re worthy on a case-by-case basis.
- “Then open a brokerage account at Goldman Sachs or Morgan Stanley, but only open the account if they promise you Facebook stock.”
Kupferberg says the deal stock goes first to the preferred customers of the banks underwriting the deal. Then it goes to the people with brokerage accounts who pass all the tests in Step 1. The scarce remainder goes to small investors to whom we wish the best of luck. If you make it that far, don’t expect the current estimated share price of $40 to last long. Add scarcity of shares and stratospheric hype, stir, and you’ll get what Kupferberg expects to be “a frenzy like we haven’t seen in a while that will drive the price up to ridiculous levels.”
Basically, if you want Facebook IPO shares, you have to be rich and powerful in order to be taken seriously.
Is Facebook A Good Investment?
“Long, long term, this could turn out to be a very good investment,” Kupferberg says. “Do you see people not using it anytime soon?”
Kupferberg says that his firm’s model thinks that Facebook is still reasonably valued around $40 per share. But in the very short term, it will be almost impossible for most people to get a piece of Facebook’s IPO, and those who do will pay a high price for it. We’re not investment counselors at ReadWriteWeb, but if you really want a piece of the Facebook action and didn’t buy one on the private market five years ago, it seems like it couldn’t hurt to wait a little while for the hype to burn off.
Disclosure: Peter Kupferberg is Jon Mitchell’s uncle.
Lead image via Shutterstock
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Ford Retains Confidence in Facebook Ads as GM Quits
May 16th
Automaker tells ClickZ it will continue advertising on the social site. While General Motors may halt Facebook advertising, according to a Wall Street Journal story today, Ford has a different attitude toward paid promotions on the social site.
View full post on Search Engine Watch – Latest
Facebook Update: Higher Target IPO Price Resulting in Stakeholder Liquidation
May 16th
On Tuesday, the world’s largest social network raised the target IPO price range to $34 to $38. If Facebook shares sell at the upper limit ($38), the social network will raise about $12.8 billion and its market value will be approximately $104 billion. As a result of the higher target price and rich valuation, a [...]
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Why Did GM Drop Facebook Advertising?
May 16th
I am sure you heard yesterday that GM stopped investing in ad space on Facebook. New research on Facebook advertising performance from WordStream may offer a few clues as to why General Motors discontinued advertising on the massive social network. Wordstream’s research provides some important data such as: Ad Performance: Click through rates on Facebook [...]
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Facebook Will Roll On, Even as GM Pulls Ads
May 15th
General Motors Co. said on Tuesday that it would stop advertising on Facebook because the platform didn’t generate enough sales. It is certainly not a great day for the social media giant, as it looks to float its initial public stock offering on Friday. Before you heed the naysayers, though, consider what Facebook is really good at.
Need proof that Facebook will weather this and countless other storms? Look no further than the comments section of the very Wall Street Journal article that broke the news. The newspaper spurs logins by riding on Facebook’s coattails.
Facebook, in other words, is seemingly everywhere online. CEO and founder Mark Zuckerberg admits that his company is lagging behind archrival Google in advertising revenue, but the loss of one big advertiser is not enough to upend a company that could be worth more than $100 billion by this time next week. More importantly, the automaker is depriving Facebook of only $10 million in direct advertising buys; it will continue to spend about $30 million annually on Facebook content, agencies that manage that content and daily maintenance of its Facebook pages, according to The Wall Street Journal.
Jeff Dachis of Dachis Group, which uses data to help clients get the best return on their social networking campaigns, said Facebook’s power lies in engagement with brands, not generating sales through display advertising, meaning the GM decision isn’t a death knell for Facebook. Dachis said Facebook advertisers need to look at the platform as helping to build long-term brand loyalty.
“Although many will latch onto this news in the next few days as a reason for the skepticism around Facebook’s advertising model to continue, we believe that this proves that Facebook’s power lies in engagement, not display advertising. According to the WSJ report, GM is still spending approximately $30 million on Facebook. They’re not abandoning ship,” Dachis said. “Engaged users on Facebook – whether they’re on mobile or the browser – will monetize better than throwing mobile or display ads at them.”
GM signaled that it would continue to develop a strategy for using its brand page on Facebook. GM marketing chief Joel Ewanick told The Wall Street Journal that the company “is definitely reassessing our advertising on Facebook, although the content is effective and important.”
The newspaper reported that GM had begun reassessing its Facebook strategy earlier this year and made the decision to pull its advertising after several executives met with Facebook officials to address their concerns. We’ve asked Facebook for comment and will update when we hear back.
While the timing – just days before Facebook’s IPO – stings, people purchasing shares are theoretically looking to become owners of Facebook. Without discounting the people who will quickly try to flip their shares, other shareholders are looking at Facebook as a longer-term investment. They understand any business has good days and bad days.
There’s no denying that some advertisers are concerned about how effective Facebook advertising is. But, as we reported earlier this month (and, incidentally, in the wake of another Journal article questioning Facebook’s advertising strategy), a lot of advertisers are happy with the returns they’re seeing from Facebook.
In fact, GM’s decision may have more to do with the fact that Facebook just isn’t the right medium for an automaker.
“Although some large brands and agencies may be grumbling, not everyone is unhappy,” said Michael Nicholas, chief strategy officer at Roundarch Isobar, a digital marketing and advertising consultancy. ”Brands whose business is more performance-oriented and predominantly e-commerce-based are seeing quality results and good service from third-party companies. Thinking about it from an ad spend point of view, it’s this ‘vocal majority’ that’s fueling all the headlines about ‘large brands and agencies question Facebook’s ad model.’”
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Staying Off Facebook Won’t Protect Your Privacy
May 15th
Stay away from social networks and people won’t know who you’re hanging out with or what you’re doing, right? Wrong. When it comes to social networking, a recent study suggests, you can run but you can’t hide.
A paper published last month in the journal PLoS One shows how researchers were able to learn about nonmembers of social networks based on information their friends posted online. Using machine-learning models, German researchers Emöke-Ágnes Horvát, Michael Hanselmann, Fred A. Hamprecht and Katharina A. Zweig were able to predict whether two nonmembers of a social network knew each other based on information shared by a mutual contact on the network.
In other words, even if you’re one of those holdouts who refuses to join Facebook and other social networks due to privacy concerns, the data your friends share is enough to let anyone with access to that data draw conclusions about you. And while the initial research in the area focuses on the relatively innocuous facts surrounding who you do and don’t know, it will become increasingly easier to draw profiles of people based on what their contacts share on Facebook.
“To our knowledge these are the first results on the potential of social network platforms to infer relationships between non-members,” the researchers wrote. They also noted that the relationships were predicted with an “astonishing” rate of accuracy simply by scanning readily available information on Facebook for students at five U.S. universities.
And the authors were working only with publicly available information. Social networks may have a vast trove of data about members that isn’t generally available. “Social network platform operators typically have access to much more detailed information on nodes such as the age, sex and (approximate) location of their members; and if they provide messaging services they can infer the quality of an acquaintance from its communication pattern,” they wrote.
Researchers have long known that studying real-world social networks is a good way to predict individual behavior. We’ve previously reported on how online social networks can be used to predict a person’s risk of contracting a sexually transmitted disease. But the latest findings suggest a path toward an all-encompassing model that may one day be able to predict much more than who you know.
“Ultimately,” the study concludes, “it evokes the question of the ownership and exploitation of relational data in the information age.”
Photo courtesy of Shutterstock.
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5 Vital Facebook Reports Every Community Manager Should Know
May 15th
Learn how Facebook Insights reports and public data sources can help you understand, at a granular level, the way your community consumes the stories you create, your fans demographic information, and how users are engaging with your competitors.
View full post on Search Engine Watch – Latest
