Chief Technology Investment Strategist, Casey Research
- General Motors, questioning their effectiveness, recently withdrew its display ads on Facebook. (Speaking of General Motors, Facebook's market cap is bigger than GM's and Ford's combined!)
- Revenue from advertising on mobile devices is likely to disappoint; the screens are simply too small and commerce activities less common and for lower value, to be as effective at advertising.
- In his IPO letter, founder Mark Zuckerberg wrote: "We don't build services to make money; we make money to build services". In other words, maximizing revenue is not his priority. He is reluctant to extend ads beyond a certain point because he believes they become intrusive and compromise the experience. Noble as this may be, it will hamper the growth needed to justify the stock's lofty valuation. Of course, Zuckerberg is a billionaire still at $27, $20, even $5 for the stock...