Wednesday, October 10, 2012

Facebook Deceivers preparing a new round of mobile revenues trick


While Wall Street has hammered Facebook's stock because of its "mobile problem" - it hasn't been making money on its fast-growing mobile user base - Sandberg calls mobile "a huge opportunity."
And Sandberg revealed that the new mobile app is "boosting engagement" more than the desktop service, saying that mobile users are 20% more likely to come back to Facebook on a given day.
Why it is bullshit?
SEC officer Jacobs wrote on March 22: “Please explain to us how you determined that your metrics are not overstated.”
Only eight days before the IPO, on May 9, did Facebook make clear in a filing that that daily mobile customers were increasing faster than advertising growth, potentially hurting revenue and profits. It was the strongest public signal that the IPO could fall short of its high expectations.
Read Facebook's May 9 amendment here.
The issue of mobile users is even more relevant today as Facebook, based in Menlo Park, California, announced on Oct. 4 it now counted one billion users worldwide, up from 845 million at the year’s start. More than half of them, or 600 million, access Facebook through a mobile device, a number that grew 41 percent this year.
In its initial filing, known as an S-1, the company said mobile usage of Facebook increased around the world and numbered 425 million “monthly active users” in December 2011. It acknowledged that it hadn’t proven it could “monetize” people using only mobile devices, where the absence of ads may “negatively affect our revenue and financial results.”

One concern, raised by several analysts, has to do with the rate at which Facebook will introduce sponsored stories to the newsfeed – both in the web and mobile channels. Right now the volume is low.

‘Excessive Expenses’

Jacobs responded on Feb. 28 by asking for a “more detailed” discussion of these key challenges. If the company’s attempts to monetize those mobile users fail, she wrote, then “ensure” that your disclosure addresses the potential consequences to revenue, “rather than just stating that they ‘may be negatively affected.’”
Vetter filed a revised prospectus on March 7, disclosing that Facebook’s monetization strategy could run up “excessive expenses.” Last year the agency pressed Groupon Inc. (GRPN) to abandon an accounting method that made the then-unprofitable daily coupon business look profitable by hiding certain marketing costs, a person familiar with the matter said at the time.

Her letters were addressed to Ebersman, who joined Facebook as chief financial officer in 2009 after holding the same title at drugmaker Genentech Inc. from 2005 until early 2009. A graduate of Brown University with a degree in economics and international relations, Ebersman replaced Gideon Yu, who left after Facebook said it wanted a successor with experience in running a public company.


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