Mobile advertising blamed for Facebook shares woe

Rating: Giant can’t work out a way to make mobile pay

It seems a “rapid shift” away from users accessing Facebook from desktop computers over to access from the mobile web and from mobile apps is being touted as the chief factor behind the decline of Facebook’s share value. So much so that there’s already been a class action launched in the USA. US-based law firm Robbins Geller has filed the action in a court in Manhattan. According to the UK’s Daily Mail here … The lawsuit states, “The true facts at the time of the IPO were that Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the company told the underwriter defendants to materially lower their revenue forecasts for 2012.” It’s a sign that the web giants still haven’t worked out ways to make money from the mobile sector.

The crux of the matter is that one of the banks backing the Faceboook IPO (Initial Public Offering) was Morgan Stanley.

It is alledged that Morgan Stanley changed its estimates for Facebook shares after a May 9th [2012] filing of an amended Facebook prospectus with the SEC.

In that filing, it is alleged that the Bank expressed caution about revenue growth due to a rapid shift by users to mobile devices.

The view was that mobile advertising to date has been less lucrative than advertising on desktops.

GoMobile News finds all of this a bit bizarre. Facebook has about 900 million users worldwide and if anybody should be able to make money out of location-based advertising, then it surely must be a huge social network provider?

There surely must be plenty of opportunities for in-app advertising for a brand and company the size of Facebook, too?

We also think that Facebook isn’t ‘thinking-outside-the-box’ enough on how to monetise its service from mobile internet users.

It has a brilliant opportunity to act as an apps store. It could even do the unthinkable and provide apps for Apple iOS users that don’t have to go through Apple’s iPhone Apps Store.

This whole fiasco shows that the mobile advertising industry still really is in its infancy.