Monday, May 20, 2013

Facebook A Year After IPO

Facebook IPO
Last year, there was much hype on the entry of Facebook into the stock market. Unfortunately, the hype ended in a disappointment with the popular social network’s share still falling behind the level of their initial public offering (IPO).

According to Juliette Garside of The Guardian, shares of the website were still trading 70 percent below their opening price of US$38 last 17 May 2013. Despite the setback, Facebook found other ways to make some unprecedented progress.

Last October 2012, founder Mark Zuckerberg announced publicly that the social media site had crossed the one billion monthly active user threshold. Furthermore, according to research firm eMarketer, the business is set to make US$ 6.6 billion in 2013 – an increase of US$ 1.5 billion from last year.

During the most first quarter of 2013, Facebook's net income rose seven percent to US$ 219 million versus the same quarter in 2012, and revenue jumped 38 percent to US$ 1.46 billion (source: AP Technology Writer Barbara Ortutay). In terms of users, the site now has 665 million individuals posting, sharing photos, and playing games each day.

"Much has changed at Facebook in a year," Ortutay said. "The company's executives and engineers have quietly addressed the very doubts that dogged the company for so long. Facebook began showing mobile advertisements for the first time last spring. It launched a search feature in January and unveiled a branded Facebook smartphone in April. The company also introduced ways for advertisers to gauge the effectiveness of their ads."

The next step for Facebook, according to the AP, is to try and convince big businesses that advertising on a social network can be every bit as effective as running a television commercial. In order to achieve this goal, Zuckerberg’s firm has developed a new set of tools designed to help advertisers reach a more specific target audience than they can through TV or in print – connecting with consumers of certain ages and with certain interests.

"Analytic tools like these weren’t available a year ago," Ortutay explained. "But last fall Facebook hired several companies that collect and analyze data related to people’s online and offline behavior. Facebook’s advertisers can now assess whether a Crest ad you saw on Facebook likely led you to buy of a tube of toothpaste in the drugstore. The services take what Facebook knows about you and what ads you saw and combine this with the information retailers have about you and what you’ve purchased through loyalty cards and the like."

"What we can see conclusively a year after the IPO is that ads on Facebook really do help drive people into the store and help them make purchasing decisions, help influence their purchasing decisions," added Sean Bruich, the website's head of measurement platforms and standards.

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