That deafening buzz? It’s the anticipation building in Silicon Valley and on Wall Street on the eve of what promises to be a historic IPO for Facebook. But not everyone is singing the social media behemoth’s praises. On Wednesday, the social media giant raised the initial public offering (IPO) price range from $28-$35 to $34-38 […]
That deafening buzz? It’s the anticipation building in Silicon Valley and on Wall Street on the eve of what promises to be a historic IPO for Facebook. But not everyone is singing the social media behemoth’s praises.
On Wednesday, the social media giant raised the initial public offering (IPO) price range from $28-$35 to $34-38 in amended filings to the SEC, which could push its valuation past $100 billion, up from $96 billion. As of this writing, Facebook is reportedly finalizing the price — perhaps edging ever closer to, or even crossing, the $40 mark — as it prepares to go public tomorrow.
Facebook will trade on NASDAQ under the “FB” ticker symbol.
Adding fuel to the fire is the prospect of newly minted Facebook billionaires and millionaires, and what the windfalls could mean to the Silicon Valley venture capital scene and startups that hope to follow in founder and CEO Mark Zuckerberg’s footsteps. Even co-founder Eduardo Savarin’s decision to renounce his American citizenship — a move some view as a tax avoidance measure — has tongues wagging.
It seems there’s no end to the enthusiasm fluttering in the hearts of both the tech and finance industries as the clock ticks down to tomorrow. Yet, while Facebook’s IPO is the talk among Wall Street traders, Madison Avenue advertising executives are sounding the alarm.
General Motors made waves this week by voicing its stance on Facebook ads. The automaker said that its paid advertising had little impact on purchasing decisions, according to a Wall Street Journal report. As a result, GM is pulling its paid ads, though it will maintain a presence using Facebook pages.
Why should it matter what GM thinks? Because when it comes to advertising, it’s a big spender.
According to the report, GM is the third largest advertiser across all media in the United States, behind Procter & Gamble and AT&T. Last year, GM spent $1.8 billion in advertising, $10 million of which went to Facebook. While $10 million is a paltry amount compared to GM’s total ad budget or the $3.7 billion in revenue that Facebook generated in 2011 — most of it from advertising — it’s a sign that Facebook’s advertising platform is struggling to prove its worth to influential marketers.
And GM is not alone in questioning Facebook’s effectiveness as an advertising vehicle, according to a DealBook post at The New York Times. Although few are as vocal as GM, Forrester analyst Melissa Parrish reports that other companies she and her colleagues have spoken to are considering shifting their spending away from the social media giant.
Complicating the issue is that users are increasingly interacting with Facebook on mobile devices like the iPhone, according to the company. On a desktop Web browser, Facebook ads are already fairly unobtrusive. The company pushes marketers toward embark on socially engaging campaigns rather than strategies that rely mainly on display ads and other traditional Web marketing techniques.
On mobile devices, Facebook advertising barely registers. In a recent SEC filing, Facebook informed, “we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”
A lot is riding on Facebook getting mobile advertising right. “Accordingly, if users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected,” concludes Facebook.
Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.
Ethics and Artificial Intelligence: Driving Greater Equality
FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning
FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Pedro Hernandez is a contributor to Datamation, eWEEK, and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the Internet.com network of IT-related websites and as the Green IT curator for GigaOM Pro.
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Property of TechnologyAdvice. © 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.
