When the trading began on May 18, however, the problems started to surface. The company’s stock rose to $45 per share for a short time and then dropped back down to close at $38. 27, just a few cents above its opening price. Investors were disappointed and confused by the day’s events, but they quickly became angry as new details began to emerge.

Based on numerous reports, Facebook’s underwriters lowered their earnings estimates during the company’s public road show. As the story goes, Facebook apparently tipped them off that its second quarter revenues were not going to be as high as it had originally expected. These underwriters, namely Morgan Stanley, JP Morgan, and Goldman Sachs, then only told a limited number of investors that they were cutting their estimates for Facebook’s Q2 and the full year.

Former Wall Street analyst Henry Blodget, who is now the Editor-in-Chief of Business Insider, calls this practice of verbally conveying estimates to selected investors “grossly unfair.” In a post on his site, he points out that the SEC rules should change to ensure that all investors have access to the underwriters’ estimates.

“This is an absurd and unfair practice. The estimates themselves are material information–the consensus of smart, well-trained analysts who have worked with the company’s management to develop realistic forecasts. Most investors don’t even know that these estimates exist, let alone that they’re whispered verbally to only a handful of big investors. All potential investors should have easy access to these estimates, as well as to any logic underlying them. The SEC needs to change the rules here.”

Facebook’s stock price dropped after this information was brought to light, and it continues to fall as more details come out. The blame has been pointed in several different directions including toward Morgan Stanley, Nasdaq, Facebook, and even toward David Ebersman, Facebook’s CFO.

Francis Gaskins, the President of IPODesktop, however, pins the blame on someone else. In a recent interview with us, he told us that Mark Zuckerberg is responsible for the company’s IPO disaster, calling the young CEO an “egomaniac.”

“If you want to play the blame game… Mark Zuckerberg himself bears the brunt of it,” he said.

Gaskins has been skeptical of Facebook’s IPO from the beginning. When Facebook filed its S-1 with the SEC earlier this year, he spoke with us and said that the company’s valuation was way too high based on the fact that its past earnings were flat.

“He [Mark Zuckerberg] was talking a year ago about a $100 billion market valuation, and his financial numbers were a lot lower than he thought,” said Gaskins. “[But] he was gonna have that evaluation come hell or high water.”

According to Gaskins, Zuckerberg allowed the company to put out projections that were too high in order to justify the $100 billion valuation. He believes this not only puts him at blame, but that it also raises questions about his leadership.

“Zuckerberg to me, instead of being a hero, he’s a control freak that doesn’t have any self-confidence,” said Gaskins. “If he had self-confidence, he wouldn’t have really made an effort to have 55 percent voting control… that means he’s never ever accountable.”

“After the disaster of an IPO, he left on a honeymoon – catch me if you can.”

“[If] they didn’t know what was happening in the second quarter,” he continued,” how can they possibly know what’s happening in the third quarter, or even the fourth quarter?”

While it is possible that Zuckerberg bears responsibility, there are other issues that could hold some of the fault as well. Analysts have credited various events, including Facebook issuing more shares of stock shortly before it went public and GM pulling its paid advertising from the platform, to the chaos that is continuing to surround the IPO. Another factor that’s been labeled as a red flag for Facebook is its mobile initiative.

Although trends show mobile usage is only going to increase, the company has not clearly defined how it will succeed in the area. The company openly admitted in its S-1 filing that its monetization efforts for mobile were yet to be proven:

“Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.”

While these issues and others were seemingly overlooked before May 18, it appears that they are now becoming realized. Now, Facebook is finding itself facing an angry Wall Street, a string of legal trouble, and a damaged reputation, some of which is illustrated in this video:

Unlike Blodget, Gaskins doesn’t believe that any rules need to change going forward. He calls what the underwriters did “normal business“ pointing out that they’re allowed to talk about the estimates. To the fact that the new research wasn’t published, he said, “There may be some harm but no foul.”

Incidentally, Congress has said that it plans to investigate the proceedings, but there has been no official word on what specific measures it may take.

Gaskins did say that he thinks underwriters will look more carefully at estimates in regards to future IPOs. He believes underwriters will be much more analytical to avoid a repeat of the Facebook fiasco.

There are reports predicting that Facebook will switch from Nasdaq to the NYSE, given its rocky start at its public debut. While it is understandable that Facebook would want a clean slate, Gaskins told us that the company “can’t wipe out history.”

These rumors and even those of Facebook building its own smartphone and planning to acquire Opera do not seem to be having a positive impact on the company’s stock price. At the close of business Tuesday, the stock price was $28.84, after dropping steadily all day.

“You can’t trust them anymore based on them missing estimates this close,” said Gaskins. “I think they’ll have a second quarter that won’t please investors, I think they’ll have a third quarter that won’t please investors, [and] I think the price will go down quite a bit.”

“I am more worried than I have been in the past,” he tells the Guardian. “It’s scary.”

Brin also indicated that he and fellow Google co-founder Larry Page would not be able to build their search engine in the current Internet environment given restrictive players such as Facebook. He categorized both Facebook and Apple as “walled gardens” saying they have too many limitations within their services.

As one can imagine, Brin’s statements have gained a considerable amount of criticism. What’s more, his perspective has also reignited the debate over what true openness actually is and what real threats lie with it.

How do you define a truly open Internet? We’d love to know.

The Web quickly responded to Brin’s interview with numerous claims of Google being hypocritical. Bobbie Johnson on GigaOM compiled a comprehensive piece on the Web’s reaction including statements from Dave Winer, Andrew Keen, and others.

WebProNews spoke with Rebecca Lieb, an analyst with the Altimeter Group and who is also veteran in the search industry, about the matter and she told us that Brin lumped two very different types of openness together. As she explained, the one side of openness covers government censorships and restrictions in regimes such as China and the Middle East. The other side of Web openness, she continued, is Web-specific and deals with “walled gardens.”

“It’s disingenuous to put the two in the same basket, which is what Brin is doing,” she said. “One is a very, very important social and political discussion; the other is a business discussion.”

The most recent threat to Internet freedom or net neutrality has been in regards to telecommunications’ companies hampering with Web access. While it is real and should be addressed, Lieb told us that there are other threats, including Brin’s concerns, that exist as well. However, she believes they are all on various levels of importance and should, therefore, be handled differently.

“There are threats to free and open Internet access through business, through governments, through anti-democratic means, but they can’t really all be lumped in one basket,” she said.

On the business side of the threat and in reference to the “walled gardens” that Brin mentioned, Lieb told us that his point would have been clearer if he had not mentioned direct competitors to Google. Even though he raised some legitimate points in this regard, she said she would have liked to see him take his argument outside of potential business threats to Google.

In addition, his bringing Google’s competitors to the table make it easier for his stance to come under attack, especially in light of recent actions from the search giant. For example, in Matt Cutts‘ latest video, he reminds people how Google may remove or demote a website.

“We do reserve the right to take action, whether it be demotion or removal, and we think we have to apply our best judgment,” said Cutts.

Here’s his complete video:

Another example is when Google announced that it was beginning to encrypt searches when users are logged into Google.com. This move, as Lieb explained, limits the openness that people once had since Google no longer shares the keyword referral data with those who don’t advertise on Google.

As evidenced in the below piece that WPN did last year when the news transpired, the overall consensus from the SEO community, including Lieb, was that this move was evil:

After these and other issues were raised, Brin spoke out on his Google+ account and said his words were taken out of context calling the Guardian report a “short summary of a long discussion.” He clarified that he did not think the openness of digital ecosystems was “on par” with government censorship of the Web.

Also, to address the comments made specifically about Google’s own practices, Brin wrote:

“So what was my concern and what about Google for that matter?
I became an entrepreneur during the 90’s, the boom time of what you might now call Web 1.0. Yahoo created a directory of all the sites they could find without asking anyone for permission. Ebay quickly became the largest auction company in the world without having to pay a portion of revenue to any ISP. Paypal became the most successful payment company and Amazon soared in e-commerce also without such tolls or any particular company’s permission. 



Today, starting such a service would entail navigating a number of new tollbooths and gatekeepers. If you are interested in this issue I recommend you read http://futureoftheinternet.org/ by +Jonathan Zittrain. While openness is a core value at Google, there are a number of areas where we can improve too (as the book outlines).

But regardless of how you feel about digital ecosystems or about Google, please do not take the free and open internet for granted from government intervention. To the extent that free flow of information threatens the powerful, those in power will seek to suppress it.”

Lieb agrees with Brin in that she believes the real concerns and threats to Internet freedom lie in anti-net neutrality and the government regimes that block Internet access. Furthermore, the oppression in the Middle East and other regions over the past couple of years only solidifies what an important role the Internet plays in staying connected to the world.

“The business threats posed by a Facebook or a Bing, or even a Google or a Apple, are small potatoes compared to really anti-democratic Internet threats such as those posed by anti-net neutrality or the governments in oppressive or non-democratic regimes worldwide,” she said.

She went on to say that more lobbying needs to happen in Washington to raise awareness of these very real threats.

Do you think the “open Web” is at risk? If so, what are the real threats you see? Please share.

The most unique aspect of Silk is the fact that it splits functionality between the mobile device and the cloud. Although others have done this in the past, Amazon hopes to take it to a new level.

What are your initial thoughts of Amazon Silk? Share your thoughts.

Al Hilwa, an analyst with IDC, spoke with WebProNews and told us that he actually wasn’t surprised that Amazon made this move. As he explained to us, Amazon is a leader in backend cloud services as well as cloud support capacity. The move was actually natural since Amazon also has a content-based motive with Kindle Fire.

“It wasn’t really a completely new idea, but it made perfect sense for what Amazon is doing,” he said.

Opera is the browser that is most recognized for the split browser, but according to Hilwa, its approach is different from Amazon’s. He said that Opera wants to make its browser available on every network and every device, while Amazon does not. Amazon is more concerned with making its devices extremely optimized and responsive as well as potentially allowing the browser to support its advertising backend.

Although Silk will not be released until next month, Hilwa believes that the technology behind Silk creates a lot of opportunities for Amazon. For instance, Amazon may decide to put it on very inexpensive devices that do not have a lot of processing. This would then allow it to put 3G or 4G on the devices, which is a move that Hilwa thinks would be “synergetic” for tablet makers.

“A browser architecture like this makes is possible to have real economical network consumption patterns that either Amazon pays for or the user pays for,” he said.

In spite of the excitement surrounding Silk, there are also some concerns. The browser leverages Amazon’s Elastic Computer Cloud (EC2) in order to allow for speedy information retrieval. However, to deliver this speed, Silk tracks the traffic patterns of individuals’ behavior.

“This kind of browser puts it in charge of a lot of information from browser users, and therein lies one of the issues with this kind of technology, which is that Amazon simply has a lot of information that you might otherwise keep cached on your desktop machine and not aggregated in any one place,” said Hilwa.

“Whenever one particular location/place/vendor aggregates too much information about people, particularly about you, me… a single individual, then there’s a danger that the information will get abused somehow. [There's] something spooky about these vendors knowing too much about you and targeting you very, very specifically with the amazingly targeted advertising that’s based on a search you may have done… that’s a little difficult for people to swallow,” he pointed out.

Silk has an “off-cloud” mode that users can use that will prevent Amazon from aggregating information, but it’s unclear, at this point what the default settings will be. Hilwa told us that, while these are concerns, there are certain capabilities that could not be possible without such a browser.

Overall, he said that Silk has the potential to be very successful but that it was hard to speculate before it is actually released.

“This is great synergy for what they’re doing,” he said. “It makes a lot of sense for them. Of course, we’ll have to wait and see if this technology actually works in terms of when it’s demoed [and] when it’s actually available on devices.”

He also told us he could see other browsers makers including Google and Microsoft adopting this type of technology in the future.

“This coupling of backend clouds with frontend devices – we’re going to see more and more of that and more and more optimizations across it,” said Hilwa. “The browser is going to be the crucial link that helps that happen.”

Do the cool features of Silk outweigh the privacy concerns or vice versa?

Researchers from Japan’s ATR Computational Neuroscience Laboratories have developed new brain analysis technology that can reconstruct the images inside a person’s mind and display them on a computer monitor, it was announced on December 11. According to the researchers, further development of the technology may soon make it possible to view other people’s dreams while they sleep.

Then, when the test subjects were shown a completely new set of images, such as the letters N-E-U-R-O-N, the system was able to reconstruct and display what the test subjects were viewing based solely on their brain activity.

(Utopic and dystopic scenarios: leasing parts of your brain space to a big corporation for a side income; building a problem solving computer based on low level brain growing farm; big brother supervising thoughts to crack down on dissidents; drawing tools; advanced lie detectors; brain exporting and importing of movies, smells, feelings…)

Comments

Pace’s findings contradict what a recent analysis of Google Trends revealed.  They should, however, stack up well against David Utter’s article on the Republican field (since both used Compete statistics).

According to Compete, then, the campaign website with the most traffic belongs to Barack Obama; Obama’s site received 318,179 unique visitors in November.  Hillary Clinton’s website was the closest runner-up, but it got just 289,615 visitors.

Things looked even more dismal for John Edwards, whose site received only 136,002 unique visitors.  Pace got into the geographic distribution of visits, though, and wrote, “Edwards’ focus on Iowa, where polling shows him very competitive, is evident as he appears to be drawing a considerable following in Iowa to rival Obama and Clinton.”

Kucinich, Biden, Richardson, Dodd, and Gravel all trailed the top three candidates, and did so in that order.  Still, with the better part of a year left to go before the election, there’s plenty of time for any person to shake (or muck) things up.

Visual analytics will be the key. Science Blog said “analysts must meld the encyclopedic eye of Google with the inductive genius of Sherlock Holmes” to accomplish this.

The inspiration of Edward Tufte, visual data display legend, motivates the ongoing work by DHS and its associated research partners:

The centers

]]> http://www.webpronews.com/dhs-emulating-doctorows-scroogled-tale-2007-11/feed 0 http://www.webpronews.com/facebook-myspace-ad-analysis-2007-11 http://www.webpronews.com/facebook-myspace-ad-analysis-2007-11#comments Wed, 07 Nov 2007 20:35:05 +0000 Robert Scoble http://www.webpronews.com/?p=41716 Here’s a 20-minute video where Jeremiah Owyang, Forrester Research’s new social media senior analyst, discusses with me Facebook and MySpace’s new ad platforms. He was briefed by both companies and has the best analysis out there right now.

]]> Here’s a 20-minute video where Jeremiah Owyang, Forrester Research’s new social media senior analyst, discusses with me Facebook and MySpace’s new ad platforms. He was briefed by both companies and has the best analysis out there right now.

Oh, and he invents a new word “fansumer.” Listen to the video and tell us whether you’re a fansumer of a brand. Oh, and my brother’s bar is on MySpace. We’ll play around with MySpace’s new hyper-targetted ads and see if they work.

Comments

]]> http://www.webpronews.com/facebook-myspace-ad-analysis-2007-11/feed 0 http://www.webpronews.com/adwords-quality-score-keyword-analysis-service-2007-10 http://www.webpronews.com/adwords-quality-score-keyword-analysis-service-2007-10#comments Wed, 24 Oct 2007 18:59:26 +0000 Navneet Kaushal http://www.webpronews.com/?p=41371 Inside AdWords introduces the Quality Score Keyword Analysis Service which will help advertisers provide more information about the Quality Score for their keywords.]]> Inside AdWords introduces the Quality Score Keyword Analysis Service which will help advertisers provide more information about the Quality Score for their keywords.

To launch Keyword Analysis page, click the magnifying glass icon beside any keyword in your account; then click one of the ‘Details and recommendations’ links.

This is a sample of the Details and recommendations page

This tool ‘gives you a detailed view of your keyword’s Quality Score — including how Quality Score impacts your keyword and ad’s performance, and how you can improve it.’

To view the Keyword Analysis page for any keyword, follow these steps:

• Sign in to your account at https://adwords.google.com.
• Click a campaign.
• Click an ad group.
• Click the ‘Keywords’ tab above the Ad Group Details table.
• Click the magnifying glass icon beside any keyword to launch the Keyword Analysis page. You can also see an overview of your Quality Score and ad visibility by pointing your cursor over the icon.

How to Use the Keyword Analysis page

At the top of the Keyword Analysis page, you’ll see your CTR, minimum bid, current bid, and keyword status (i.e. active or inactive for search). Below this information, there are two tabs — an ‘Ad showing?’ tab and a ‘Quality Score’ tab.

• Ad showing tab: Click the ‘Ad showing?’ tab to see information from the Ads Diagnostic tool. Find out whether or not your keyword is triggering ads to appear on Google, reasons why, and ways to improve your ad performance. Results are based on specific Google search and geographic criteria. To test using different criteria, click the ‘Ads Diagnostic Tool’ link on the page or from your ‘Tools’ page.

To learn more about the Ads Diagnostic Tool, visit How can I find out whether my ads are showing?

• Quality Score tab: Click the ‘Quality Score’ tab to get details and recommendations about your keyword’s Quality Score. At the top of the tab, find your Quality Score rating — Great, OK, or Poor. Next, find tips on what to do in order to achieve the best ad results. Finally, see how different components that factor into your Quality Score as a whole are performing. Our system checks your keyword relevance and landing page quality. For each problem that we may find, we’ll provide ways to help remedy it.

To learn more about Quality Score, visit What is Quality Score and how is it calculated?

Comments

]]> http://www.webpronews.com/adwords-quality-score-keyword-analysis-service-2007-10/feed 0 http://www.webpronews.com/google-helps-with-keyword-analysis-2007-10 http://www.webpronews.com/google-helps-with-keyword-analysis-2007-10#comments Tue, 23 Oct 2007 18:19:10 +0000 WebProNews Staff http://www.webpronews.com/?p=41331 The vagaries of keyword Quality Scores for AdWords have caused advertisers to ask for more information from Google.

Via the AdWords blog, Google delivered some news that should be of some help to its ad clients.

A new Keywords Analysis page became available in AdWords, as part of the Ad Group Details table. The magnifying glass icon launches Keyword Analysis:

At the top of the Keyword Analysis page, you’ll see your CTR, minimum bid, current bid, and keyword status (i.e. active or inactive for search). Below this information, there are two tabs – an ‘Ad showing?’ tab and a ‘Quality Score’ tab.

Ad showing tab: Click the ‘Ad showing?’ tab to see information from the Ads Diagnostic tool. Find out whether or not your keyword is triggering ads to appear on Google, reasons why, and ways to improve your ad performance. Results are based on specific Google search and geographic criteria. To test using different criteria, click the ‘Ads Diagnostic Tool’ link on the page or from your ‘Tools’ page.

Quality Score tab: Click the ‘Quality Score’ tab to get details and recommendations about your keyword’s Quality Score. At the top of the tab, find your Quality Score rating – Great, OK, or Poor.

Next, find tips on what to do in order to achieve the best ad results. Finally, see how different components that factor into your Quality Score as a whole are performing. Our system checks your keyword relevance and landing page quality. For each problem that we may find, we’ll provide ways to help remedy it.

The usual advice about ad relevance still stands. Google has been more aggressive since last year about weeding out ads it deems less relevant to a query. Failing to make ads and their landing pages more suitable to Google’s expectations could mean few or no ad displays for a campaign.

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