Facebook needs to ‘Face’ the reality of it’s ‘Book’ of business

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Zuckerberg rightly said yesterday “The best type of advertising is a message from a friend” but in light of FB’s stock decline, the message from his friend (CFO Ebersman) stating that “the important thing for us is to stay focused that we’re the same company now as we were before” is down right wrong and dangerous.

Facebook was a privately held sexy, social media start up with a web site that captured the hearts and keyboards of millions: Different, heroic, with principles that made tem known for being remarkable and fresh, joined by millions for being a challenger of the rule and above all, shareable. Today it is a massive ‘transparent’ public company, that misfired with an advertising platform that’s not delivering results and subscriber usage in decline partly due to the rapacious increase in smartphone usage likely to reduce its revenues even more. Like it’s namesake, Facebook, this entirely different company now needs to ‘face’ the reality of it’s ‘book’ of business.

 

FaceBook ads ‘They Yield No Real Value, And No Profits.’

Image representing Facebook as depicted in Cru...
Image via CrunchBase

Way before pundits took the wheel from GM last week slamming the brakes on advertising with Facebook as an advertising platform, pundits have argued that whereas Google is a search platform that’s psychologically right for the user as they’re open to advertising messages, Facebook is a social platform that’s not due to the user being focused on social interaction.

Apparently those who have advertised on Facebook comment that the giant promotes big returns on ad spending, but many feel like they were burning money and delivered nothing. Worse yet, there’s rumor of a “pattern of generosity” occurring within the pipes of Facebook with some sounding off “ponzi scheme” as if there are odd financial shenanigans going on? Compounding matters further, LinkedIn, Groupon and now Facebook kick started a new trend of investors selling their shares at the IPO. As the WSJ was touting a few days ago, the smart money woke up running, saying that “Goldman Sachs will sell as much as 50%, up from 23% previously. Tiger Global will sell up to 50% of its stake. Previously it planned to sell 7%.”  Clearly it’s like trying to see which side to turn whilst wearing a hoodie.  Oh well, until we know, just kick your agency and blame the advertising, but remember it’s an entirely new territory yet to be tapped. And thus it shall remain until brands, FB and agencies introduce a business model that works in their “Big Idea”  that will get teenagers to pay a monthly fee to host their life stream that is paved with the start-up vanity of bloated relics that promised the holy grail – young loyal spending consumers. The cycle repeats itself.