Facebook Woes Continue as $1 Billion Slashed from Earnings Forecast
Facebook has endured a torrid time since its IPO earlier this year. Their first ever earnings report failed to hit the mark, sending their stock nose diving downwards, and unfortunately for them it seems their second earnings report is to be just as gloomy.
The prediction comes from online market researcher eMarketer. They predict that revenue at Facebook this year will be around the $5 billion mark. Whilst a decent number, it is nonetheless $1 billion less than they expected to earn this year when they made their 2012 predictions back in February during the pre-IPO fervour.
Despite the gloomy figures, they would nonetheless represent a 34% leap in advertising revenues from the previous year, with a further 29% rise predicted for 2013.
The poor figures reflect the significant concern over the effectiveness of Facebook advertising, especially on the Facebook mobile platform, which users are increasingly turning to.
The new forecast could add to investor worries that Facebook’s growth is stalling as its advertising sales, especially on mobile devices, come up short. In a market that was down about 1% today, Facebook’s shares fell a penny, to $19.09. That’s about half their IPO level.
“Major marketers are still questioning the effectiveness of advertising on Facebook, and they are concerned that their ability to measure results is underdeveloped,” eMarketer analyst Debra Aho Williamson said in the release. “Facebook is working on addressing these concerns, but it must move even more quickly.”