Mobile is Bad for Facebook’s Business

Diminishes ad content

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Mobile is Bad for Facebook’s Business
[ Business]

It was recently reported that 54% of Facebook users access the social network via mobile devices, and now as the company readies its IPO, the issue of how its ad business is affected by mobile use was mentioned in its latest filing with the SEC.

Facebook founder Mark Zuckerberg, terrifying old-timey investors whilst making rounds in his security-hoodie, has along with other execs pointed out how the growth in mobile use of the site can affect the future worth of the Social Network, which is presently shooting for a $96 billion valuation. While Facebook has recently commenced adding sponsored stories to mobile news feeds, it’s still clear that more mobile essentially equates to less ads, which is Facebook’s bread and butter.

A recent comScore report has shown that in March, Facebookers spent about 441 minutes accessing the site via their phones, while only spending 391 minutes via their desktops. This gap is expected to grow, and Facebook is going to have to figure out how to better handle mobile ad content. The market is obviously established, ads just need to be better adapted for handhelds.

Mobile is Bad for Facebook’s Business
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  • http://www.LAokay.com Steve G

    The #1 problem with the IPO in my opinion is the valuation of the company. The typical valuation of a company at IPO time is 3-5 times current earnings. Not even profits, just gross earnings. Right now Facebook is valuing the company at over 20 times current earnings. I see people buying the stock initially simply to hold on and see how high the price can get before they sell it off, take their profits, and leave other investors holding a piece of a company that’s worth less than they paid for it immediately after they bought it.

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