It’s been quite the couple of weeks for Facebook – from the long-awaited launch of its IPO offering, to chief egg Mark Zuckerberg getting hitched, and the announcement of its own photo app just weeks after buying Instagram.
Here’s a short recap of what’s going on in Facebook’s world.
Was the IPO Really All That Bad?
By now, everyone and their mother will know that Facebook launched itself onto the publicly traded stage with a lot of fanfare and then promptly fizzled out. Shares in the social giant topped at around $42 (after coming out at $38) and are currently sitting around the $28 mark – losing a third of its value since the launch.
So a complete disaster, right? Maybe not a complete one. The IPO market when Facebook launched was a shaky one – Dealogic said six IPO’s were stopped before going public around the time of Facebook’s offering because of market conditions.
Additionally, last year there were only 80 IPO’s in the U.S.,which is a third of the number between 2004-2006.
Given that one in 10 IPO’s normally trade at least 20% below their offering price, and there’s still probably life left to reinvigorate Facebook yet before we call it a complete failure.
Counters and the Truth About The GM Pull Out
Part of Facebook’s shaky entrance into the public stock exchange was believed to have been the after-effect of the announcement that General Motors had pulled their Facebook ad campaigns to the tune of $10 million.
GM’s official take was that “the ads on Facebook have little impact on consumers’ car purchases.” The reactions were quick, with many pointing out the flaws in the ad model at Facebook for brands.
But how much of GM’s statement was a bigger issue for brands, and how much of it was down to GM’s failings themselves?
For example, while $10 million isn’t chump change by any standards, it pales in comparison to GM’s overall ad budget globally, which stands at $1.8 billion.
Then take a look at their big rival Ford, who wasted no time in piling on the agony for GM by saying their ads work just fine – because they have a strategy. Ouch.
The most interesting part, though, is Facebook’s take on the matter. They claim that GM wanted full page advertising, as opposed to the more subtle Sponsored Stories approach that brands and advertisers currently use. Facebook said no, citing user experience as more important than GM’s budget.
If this turns out to be true, it’s a major win for Facebook in the eyes of their users, and a warning to brands that old school advertising isn’t welcome on their platform. Works for me.
Money Well Spent?
Short recap. Facebook buys photo app Instagram for $1 billion. Cue gnashing of teeth from Instagram users about the platform being ruined, and assurances from Facebook the app will be left alone. Looks like Facebook was right.
Shortly after the purchase of Instagram, Facebook announces its very own photo app, called Facebook Camera, whose features make it sound an awful lot like Instagram. So why bother purchasing them in the first place?
Simple – kill the competition and buy your way into the mobile market fast. Facebook’s mobile experience so far has been crap, to say the least, on all platforms. Their official Facebook app sucks, and many of the core features aren’t usable on third-party apps.
By buying Instagram, they take over one of the best way to share photographs on Facebook and combat Google’s easy upload feature to Google+ via that platform’s superior app.
Then, by announcing Facebook Camera, they now have a bona-fide app that will make the mobile experience on Facebook (and not just image sharing) a lot smoother than it currently is. Everybody wins – Instagram users keep their beloved app and Facebook users who don’t have Instagram get their own version.
So, quite the few weeks for Facebook, and this is bound to be just the start. Who says all the interesting stuff is happening over at Google+?
- Facebook Might Make 2 More Acquisitions (newser.com)
- Facebook launches ‘Instagram rival’ camera app (telegraph.co.uk)
- FACEBOOK FALLOUT: These Companies Just Got Downgraded (FBZNGA) (businessinsider.com)