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Facebook’s relationship status with its investors and advertisers might have changed to ‘Its complicated’ but are we reading too much into it, a little too soon?
July 30, 2012 2:33 by Priyanka Pradhan
In cash rich, lucrative markets such as the Middle East, social media advertising and marketing have only just begun to be explored. Facebook has recently up shop in Dubai, in order to milk this cash cow to the fullest.
According to a recent survey the number of Facebook users in the Arab world rose 50 percent year-on-year to 45.2m at the end of June 2012. The ‘Fourth Arab Social Media Report’ by Dubai School of Government’s Governance and Innovation Program also reveals that Since June 2010, the number of Facebook users has tripled in the Arab World. The report found that around a quarter of Arab Facebook users come from Egypt and another quarter are in the GCC countries, with Saudi Arabia and the UAE making up 80 percent of users in the Gulf region.
But what about Facebook’s plummeting fortunes, one might ask. Facebook’s highly anticipated $5 Billion IPO fell flat due to unrealistic expectations, fueled further by speculations in the media. The company, valued at $100 billion is going through a tumultuous time with the shares shedding a third of their value since May. The hefty stock compensation charges borne by Facebook are the main reason behind the reported $157 million net loss in Q2. However, despite the debacle, Facebook said it earned 12 cents a share, in line with Wall Street’s forecast.
Another criticism is that the year-on-year revenue growth during the last quarter was just 45%, compared to 88% from 2010 to 2011 and 154% from 2009 to 2010. Yes, there has been a decline in growth rate but the changing consumption habits of Facebook users has a lot to do with it and Facebook is doing everything it can, to gain ground.
An article in Adage says that overall ad impressions on Facebook in the U.S. declined 2% from last year due to the shift from desktop PCs, where Facebook shows lots of its “marketplace” ads, to mobile, which has relatively limited real estate. While it might struggle to get it right in terms of monetizing its mobile app or optimizing Facebook on the go for advertisers through sponsored stories, it is definitely taking a step in the right direction. It may be too early to write off Facebook, just yet.
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