Mark Zuckerberg is a worried man. He is constantly living under a fear of losing everything that he got, and that to overnight. His fear finds its root in the fact that more and more people are using smartphones to access web and Facebook, and it does not have any idea about monetizing this traffic, which pulls down its average revenue per user (ARPU).
The paranoia of Zuck was evident from the list of risk factors his company submitted at the time of filing for IPO. The company made 6 amendments in its S-1 filing to IPO. One of the most worrying things for Facebook is losing advertising revenue because of mobile users.
List of 35 Things that Could Kill Facebook
1. We could simply lose users, or fail to add new ones.
2. We could lose advertisers — and new technology may let users block ads.
3. Facebook’s mobile platform doesn’t show ads — so the more that grows, the worse for us.
4. The platform for Facebook apps might not be successful.
5. The competition from Google, Microsoft and Twitter could heat up — not to mention other social networks around the world.
6. More governments could restrict access to Facebook.
7. Users could turn their noses up at new products.
8. The Facebook culture is all about rapid innovation and getting users engaged — and that could come at the cost of profits.
9. Unspecified future events could tarnish our brand.
10. Bugs might give people access to users’ information that they’re not supposed to see.
11. The media could turn on us.
12. Our quarterly financial results could be difficult to predict.
13. Zynga accounts for 12% of our revenue. If we part ways, that could seriously hurt us.
14. Our revenue grew by 88% last year — and that’s simply not sustainable. Growth is bound to decline.
15. The U.S. laws and regulations we’re governed by could change or be reinterpreted.
16. If our patents and copyrights aren’t granted — or aren’t effective — it could seriously hurt us.
17. We have some patent lawsuits on our hands that could end badly.
18. We’re also involved in class-action lawsuits, and we could lose them too.
19. Mark Zuckerberg has a massive amount of shares, which concentrates power in the hands of one man.
20. There’s a complicated tax liability connected to a particular kind of stock unit we gave out — one that will be taxed at 45%.
21. If we need more rounds of investment, the terms might not be reasonable.
22. Costs might grow faster than revenue.
23. A lot of our servers are handled by third parties, and they might be disrupted.
24. We’ve started building a lot of our own data centers to handle traffic, and we’ve got limited experience doing this kind of thing.
25. Our software is incredibly complex and may have a lot of bugs.
26. We can’t say for sure that we’ll handle our growth effectively — we have more than 3,000 employees now, and that could spin out of control.
27. If we lose our leaders, like Zuckerberg and COO Sheryl Sandberg, that would really harm us.
28. People might sue us over all sorts of stuff posted on Facebook — intellectual property, copyright, defamation, and so on.
29. Viruses, hacking, phishing and malware. Oh my.
30. Payment systems in Facebook apps could mean new government regulations.
31. We’re continually expanding abroad, and we may not understand all the risks in new countries.
32. We’re planning to acquire lots of other companies, which could disrupt everything at Facebook.
33. We might default on our leases or our debt.
34. Our tax liabilities, in general, are bigger than we thought.
35. U.S. tax code reform, if it happens, might hit us where it hurts.
General Motors Hate Facebook Ads
Recently, General Motors (GM) has joined the list of big companies that shunned Facebook in the recent months. According to a Wall Street Journal Report GM has decided to stop paying Facebook for PPC ad and instead will continue to use the medium for free via its Fan page, “GM will continue to promote its products on Facebook, but without paying the social-media company, the GM official and other people familiar with the matter said. Many companies maintain free Facebook pages.”
This has led to suspicion about Facebook Future and its ability to sustain the revenue growth of 88% that it recorded in 2011. It is worth pointing out that in the first Quarter of 2012, Facebook is already down by 7.5% of its earning in the previous quarter.
People started un-Liking Facebook
Ever since Facebook has introduced its least-famous timeline, it has created problem for itself. Now more and more people, many of whom were once avid Facebookers, are showing discomfort with the social giant (see infographic below). They probably are waiting for the right time to say goodbye.
Facebook – A Fad?
At least this is what 46% of Americans think about Facebook. For them, Facebook is like any other passing fad. This was revealed in a study conducted by CNBC and the Associate Press.The study was conducted with a sample size of 1000 individuals above 18 years of age.
This could be a strong deterrent for Facebook which is set to issue its IPO in less than a week time. The price of each share will be between $34 and $38, as per the amended S-1 it filed this week.
The respondents inThe-Associate-Press-CNBC study thought that this price point is high for Facebook share, but 51% believed that it would be a good investment against 31% who disagreed.
The saga of love, hate, and suspicion will continue until Facebook starts trading for the first time, and the reality behind apprehension and fear will only be known through market sentiments, couple of months down the road.
April 22, 2013, 5:55 am UTC
April 4, 2013, 5:21 am UTC
March 29, 2013, 4:57 am UTC
March 15, 2013, 7:02 am UTC