“Look out Facebook!” the News Corp CEO wrote today in a tweet. “Hours spent participating per member dropping seriously. First really bad sign as seen by crappy MySpace years ago.” Easy to see why he’s still smarting over the “crappy” asset that he bought in 2005 for $508M and sold two years ago for $35M. But his warning also reflects the passion Facebook inspires among supporters and critics alike on the anniversary of its ill-fated initial public offering at $38 a share. The stock closed today at $26.25 — down 31.3% — and has been pretty much flat for more than five months. Bears say that Facebook can’t sustain its torrid growth as it faces potent competitors — including Google, Twitter and Tumblr — and a shift among users from personal computers to advertising unfriendly small screened mobile phones and tablets. “Facebook is now scrambling to boost revenues through bigger ads that take over the entire screen,” BTIG’s Rich Greenfield notes today. He contrasts that to Google+, a social network that “is not out to harm the user experience through disruptive, annoying, spammy ads, they simply want the data to improve search and other products.” READ MORE »
Facebook‘s Mark Zuckerberg and Sheryl Sandberg were bullish about mobile ads and the apps that help drive them during the company’s Q1 earnings call today. Facebook posted revenue of $1.46B for the quarter, up 38% from …
One of Silicon Valley’s top investors — and a key, early supporter of Mark Zuckerberg’s social network company — won’t stand for re-election at the June 11 annual meeting, Facebook says in an SEC filing. James Breyer has been …
These are among investors’ top concerns following Facebook’s unveiling yesterday of its Facebook Home smartphone super-app, which will put its services front and center on Google‘s Android operating system. It’s an important initiative for Facebook. Many on Wall Street fear that the social network company is caught in a dilemma: It needs to sell ads, but will turn off lots of smartphone and tablet users if it clutters their small screens with sales pitches. That’s why Sterne Agee’s Arvind Bhatia says that early versions of Facebook Home will be ad-free, but “over time the ‘Home’-based home screen will start to display very relevant, targeted, slightly larger, and visually appealing ads –all positive for ad rates.” If that happens then “Facebook Home will be a lot less appealing to consumers,” BTIG’s Rich Greenfield says. Even without the ads, he wonders whether many users want their news feeds prominently displayed on their home screens noting that “always on pictures from what you/your friends/your family did last night could be a wee bit embarrassing when you turn on your phone next to someone.” He and others also want to see whether Google will see Facebook Home as a threat.
This will “make it easier and more fun to find TV shows and movies to watch and discuss with friends,” Netflix says this morning. Starting today, streaming subscribers in the U.S. can add “Friends’ Favorites” and “Watched by your friends” rows to their search screens. They can choose whether to share info about the videos they watch just in Netflix, or to also add Facebook. By the end of this week, Netflix says the social network tie-ins will be available to all of its U.S. members. The features have been available in other countries for more than a year; Congress’ amendment in January to the 1988 Video Privacy Protection Act made it possible to introduce them here. ”There are few better ways to find a movie or TV series you’ll love than hearing about it from your friends,” says Tom Willerer, Netflix VP Product Innovation. The company says that members will have to opt in if they want the Facebook integration: They can go to ”Social Settings” on Netflix.com to make the change.
The social media company calls this Graph Search — and CEO Mark Zuckerberg says it’s different from conventional Web search: The service, still in the beta testing phase, will just include information that Facebook users or friends have posted and shared with each other. For example, people could look for “friends who like Star Wars and Harry Potter,” or “photos of my friends before 1990,” he says. Results will only include information that’s already available to the user, with a special emphasis on people, photos, interests, and places. “Graph Search will appear as a bigger search bar at the top of each page,” the company says on a web site describing the plan. “When you search for something, that search not only determines the set of results you get, but also serves as a title for the page. You can edit the title – and in doing so create your own custom view of the content you and your friends have shared on Facebook.” Graph Search will begin in English, with other languages to come later. The company is working on a mobile application, and on ways for users to fine-tune the information that they make available. Facebook could use some fresh energy: The number of active users in the U.S. dropped by 1.4M last month, monitoring firm SocialBakers says according to a report on MarketWatch.
Listen to episode 11 of our audio podcast “Deadline Big Media, with David Lieberman.” This week, Deadline Executive Editor David Lieberman and host David Bloom discuss why Facebook is winning back some friends on Wall Street; why Big Media companies are going batty for baseball broadcast deals; how Black Friday may not be enough to pull Best Buy into the black, and what it may mean for Hollywood; and how the fall of Rise Of The Guardians in its opening weekend box office may be a challenge for DreamWorks Animation.
The stock is up more than 8% mid-day after two analysts upgraded their recommendations, and a third raised his price target. Bernstein Research’s Carlos Kirjner changed his rating to “outperform” from “market perform,” and upped his price target by $11 to $33. He says that investors underestimate Facebook‘s potential to sell ads that target people who visit the social network on smartphones and tablets. The company’s making progress in helping advertisers to insert provocative messages in users’ news streams — not just in separate displays. That should give Facebook more time “to become something different from (and better than) a very large display advertising publisher.” Kirjner projects that Facebook’s ad sales will hit $6.2B next year and $7.8B in 2014 — which he says is “materially above consensus” from other analysts.
Some investors anticipated that Facebook would be up today — but I don’t know anyone who envisioned a 12.5% pop to about $22.33 in mid-afternoon trading even as about 804M additional shares became available for sale. Indeed, the conventional …
You might think so based on today’s rally, which sent Facebook shares up about 19% as of mid-afternoon to about $23.20. Remember that yesterday the stock closed at $19.50, down 48.7% from the $38 IPO price in May. But that was before the company released its Q3 earnings report and led a conference call that seemed to address one of investors’ most nagging questions: Can Facebook make real money from ads to consumers who access the social network from their smartphones? Pivotal Research Group’s Brian Wieser was encouraged, raising his target price by $2 to $30 after hearing execs explain why “more mobility will lead to more consumption of Facebook.” Barclays Equity Research’s Anthony DiClemente also raised his target price, by $3 to $26. “Given mobile traction and potential revenue from new products,” he says, “3Q may mark a near-term inflection point in sentiment, as [Facebook] should benefit from the [year-over-year] effect of mobile for several quarters to come.”
This tells you how hungry investors are to hear something encouraging about Facebook. Shares are up more than 8.6% after hours following a Q3 report that included a nice 61% year-over-year increase in the number of mobile monthly active users. The company had a net loss of $59M vs a $227M profit last year — largely explained by the 64% increase in costs for share-based compensation and related payroll taxes and income taxes after it went public in May. Revenues rose 32.3% to $1.26B. That’s ahead of estimates for $1.23B. Without the extraordinary tax hit, the company figures earnings per share would have come in at 12 cents a share, beating forecasts for 11 cents.
Two analysts warned today that the social network giant could fail to live up to Wall Street’s financial expectations — which contributed to a 2.4% drop in the share price. It closed at $20.40, which is down 8.4% over the last four days. BTIG’s Richard Greenfield downgraded shares to “sell” from “neutral” with a $16 price target. He warned that Facebook’s effort to include ads and other services designed to generate sales could backfire. They’re cluttering people’s news feeds with ads that are “relatively generic…with very little targeting and with a very low bar in terms of the level of creativity Facebook requires,” Greenfield says. “To make matters worse, we increasingly see brands violating Facebook’s social mission by deceptively trying to acquire Likes, so they can target you and all your friends going forward.”