DecryptedTech

Sunday27 November 2022

Can Facebook Pull Out Of The Dive It Is In Without Alienating More Users? We Doubt It


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When Facebook decided to go public we had a feeling that is was a very ill-conceived idea and that their tendency to do things that their users and lawmakers do not like would come back to hurt them. On the days leading up to the IPO there was a flurry of activity while people tried to get stock that they felt was going to be a goldmine similar to Microsoft or even Apple. On the other hand there were a few more level headed people that remembered the secretive way Facebook does things and knew that it was only a matter of time before the stock tanked.

Now it seems that Facebook’s stock has fallen down to less than half of its original IPO value. The stock closed today at $21.20 while the IPO value was listed at $45 but quickly dropped to 38.23 on opening day. Since that day Facebook as struggles to keep around the $30 mark until they announced to the world that as many as 80 million accounts might be fake accounts. After that the stock dropped into the $20 range quickly and has bounced around that point for the past few weeks.

Facebook is at a point where they have to do something to appease their investors or they will begin to sell of their stock and force the value of Facebook even lower than it is. Facebook already knows that their advertising is not what it should be (or what they claimed), but can no longer hide those numbers from everyone. They also have gotten into more trouble lately and recently lost a case where they were using likeness of their users in ads without permission. Facebook also is facing problems in Germany where the German government is requiring them to delete all biometric data collected about German Facebook users. The data collection was done without the express permission of the users and is therefore illegal in Germany.

So what can Facebook do to bring in money? Well if they are Facebook you can bet it involves doing something that users will not like. We already know that Facebook users are subjected to newsfeed ads that try to get by as being a Like from a friend. The problem is that these are like of corporate pages that each user might not have any interest in, but because one of their friends might like that page they are suddenly subjected to it. On top of that Facebook also has tried to push their Pay to spam Promote option where a company can pay extra money to reach more of their fan base. You can see where we are going with this and you are right. It will be a combination of these items; Facebook is going to allow companies to pay to have advertisements inserted into people’s news feed. Right now Facebook claims this is only a test for a few companies and to a limited number of users. However, this is what they said about paid to promote, Timeline, the Facebook emails and pretty much every other feature that they have presented. Even the biometric data collection was supposed to be a limited trial run for certain people. It turned out that from the beginning Facebook was collecting this information about any and all pictures that were uploaded to Facebook.

Mark Zuckerberg simply does not have the mentality to run a public company. He has his way of doing things and that does not always coincide with what Facebook users want. We can only imagine that this will be the same thing he does with investors and stock holders. Zuckerberg is a very smart person, but that does not always make the best leader when it comes to conforming to the way things are done in the corporate world.

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Last modified on Wednesday, 15 August 2012 22:08

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