Facebook Mobile Faces Doubters on Wall Street

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

facebook-doubtersFacebook appears to be doing better on mobile apps – with 23% of advertising revenue coming on mobile platforms – but many investors still are skeptical of its long term prospects.

Facebook still is not able to show its growing mobile audience enough advertisements to compensate for all the users moving from desktop to mobile platform, according to a new report by BTIG, an investment research company.

BTIG believes that as more consumers switch to mobile apps, they will be spending less time on Facebook. Investors don’t think that the social giant can continue to sell ads on mobile like they did at the end of 2012.

BTIG downgraded the company from neutral to sell. It believes that the company’s mobile ad growth slowed at the end of last year, and Facebook tried to avoid reporting those figures in its most recent earnings report.

BTIG estimates that Facebook, which is a major haven for job recruiters today, averages $3.4 million per day from its mobile ad sales by the end of the fourth quarter. That shows a not-impressive 12% change from the last quarter when Facebook stated that it was earning $3 million per day with ads on mobile newsfeeds.

BTIG set a new price target of $22 for Facebook, which means that it thinks that the best days for Facebook are behind it. Doubts about Facebook are common on Wall Street. Investor unhappiness with the firm’s financials and huge spending in 2013 have slowed down the company’s climb back to its IPO price of $38.

Facebook has earned about 60% of its lost value since its original IPO. But, desktops are where Facebook earns most of its revenue, and millions of people each month are leaving their desktops behind for mobile. Many investors think Facebook’s revenue will decline in the future because so many users will be mobile users only.

Still, there is no doubt that Facebook has a lot of power over the Internet these days…

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