On the eve of Facebook’s debut as a publicly traded company, a new concern has arisen according to the Washington Post article “Facebook Warns Potential Investors That Mobile Is An Even Bigger Risk Than Originally Disclosed”. The Facebook mobile app, which is largely responsible for the continued growth in the numbers of their “daily active users” (DAU) is behind the mounting worries, as a lack of advertising on the mobile platform is decreasing income and revenue as their DAU numbers climb.
From the article:
“The revised mobile warning seems especially pertinent after Facebook reported a disappointing first quarter. Facebook made $205 million in net income on $1.06 billion in revenue in Q1 2012. The revenue figure was six percent lower than in the previous quarter, and the income number means that Facebook made $28 million less than it did in the same quarter last year.”
Currently seeking investors, Facebook CEO Mark Zuckerberg and his advisors must come up with a strategy and launch a revamped advertising initiative soon, if they hope to make their move into the public sector count. It is a bit shocking that this came as a surprise to Zuckerberg and Co., as a number of popular applications have positioned banner ads on the top and bottom of their interfaces for years, and these ad placements have been largely tolerated the app-happy mobile customers so far. Facebook should also be aware of the advantages of their design, as users on other platforms are already coping with the rising number of customized ads in their news feed.
Derek Clark, May 16, 2012