Facebook Doldrums

Facebook's problem is very real. This is not like when Amazon's stock price nosedived after the dot com bubble burst in 2000. That was an industry wide event. This is a Facebook specific event. Compared to that LinkedIn is doing fine for now.

And this is about cold, hard cash.

Data mining is where the money is at for Facebook. More mobile usage is not bad news - quite the opposite - if data mining is the primary way you monetize. More engagement means more data.

Below $20 is the red zone. Facebook has already entered that.

How Facebook Could Save Its Shattered Share Price

Now as it plunges towards half its IPO value, it’s entering a state of emergency

Related articles

• Facebook stock plunge takes hundreds of millions away from California budget projections
• Facebook stock drops below US$20 as executives announce exits
• Facebook Stock Price Drops Below US $20
• Facebook Stock - Why it's not another Dot-Com
• Facebook's biggest problem
• LinkedIn 2Q net income falls, revenue soars
• Facebook stock rallies back from post-IPO doldrums amid campaign to counter doubts
• Facebook Shares, 44 Percent Below IPO, Continue To Fall
• Facebook, Selling at Half Off Wall Street's MSRP, Has Its First Lock-Up Expiration Coming Very Soon
• California Says Tax Revenue 'at Risk' From Facebook Drop

Zynga Getting Hammered

Its IPO has not been good for Zynga, nor for Facebook. They have been hammered. Not long back Fred Wilson on the East Coast and John Doerr on the West Coast talked of Zynga as the fastest growing company they ever had in their portfolios. I guess there are ups and downs. Right now happens to be a down time. It is not that Zynga's user base has shrunk dramatically. This is more a case of Wall Street looking at cold, hard cash. If you don't have it, you don't have it.

Just like Facebook Zynga is also struggling with mobile.

Zynga COO Said To Lose Product Oversight As Growth Slows

Pincus embarked on the overhaul in early July, at the close of a quarter marked by slowing sales growth and a drop in demand for virtual goods. Schappert, lured away last year from Electronic Arts Inc. (EA) with a pay package worth $42.8 million, has lost support within the company and taken some of the blame for its underperformance ..... “The place is in utter meltdown mode” .... The stock has dropped 72 percent since the market debut. The decline accelerated last week after Zynga reported sales and profit that missed analysts’ predictions. ..... The reorganization was aimed in part at making mobile- software development more of a priority across Zynga

Related articles

• Zynga COO Said to Lose Product Oversight as Growth Slows - Bloomberg
• Here Are The Zynga Insiders Who Cashed Out Just Before The Stock Crashed... (ZNGA)
• First insider trading lawsuit filed against Zynga after executives cash out
• Zynga Insiders Who Cashed Out Before The Stock Crashed
• Zynga CEO Mark Pincus, Other Execs Accused Of Insider Trading
• Zynga faces a pair of lawsuits from irate investors
• Lawsuit Says Zynga Insiders Knew Stock Would Tank When They Cashed Out [Zynga]
• Report: Zynga Insiders Dumped Lots of Stock Before It Tanked [Zynga]
• Zynga Gets Hit With Insider Trading Lawsuits (ZNGA)
• The Ville moves in on Zynga Poker as the top game on Facebook

Facebook At $25: This Is Not A Glitch

Image via CrunchBase

Despite hitting its earning projections, Facebook stock falls to a new low at $25

UPDATE: Currently, the stock sits at $24.43, down 9% in after hours trading.

LinkedIn's earnings have doubled every quarter since it went IPO, and so its lofty valuation has held ground. Facebook's IPO was a nosedive, and part of it was blamed on some kind of a technical glitch, but that could not have been the full story.

For the size of its user base Facebook has lukewarm revenues, and there are no plans/signs of robust growth there. The revenue trajectory feels like a plateau, and hence the hammering.

This is what I said on May 23.

Related articles

• Solid growth in FB's first earnings report
• The Facebook IPO Fiasco
• Facebook to post first earnings today since IPO
• Facebook's Conference Call: The Highlights
• Facebook's first financial results: live - Telegraph.co.uk
• Facebook's stock tumbles after 1st public quarter
• Facebook's first public quarter proves solid
• Facebook shares fall on 1st earnings report since IPO
• Facebook posts loss in first quarterly earnings report

Facebook's Money Problem

Image via CrunchBase

Facebook's Earnings Report Underscores Its Challenges

the decelerating growth of its advertising business, which accounted for 85 percent of its $3.7 billion in revenue ..... in the last quarter, Facebook got $1.28 in revenue from each of its users, which is barely changed from the same time last year. .... the average revenue per user in the U.S. and Canada jumped to $3.20 from $2.84 a year ago

There is no relationship at Facebook between user growth and revenue growth. And that seems to be the problem. Long term I am not worried. There are several ways to monetize Facebook. Facebook has to figure out Facebook-unique ways to make money.

Related articles

• Solid growth in FB's first earnings report
• Facebook Sales Top Analysts' Estimates as Ad Spending Gains - Bloomberg
• Facebook earnings: How much will Zynga's troubles hurt?
• Facebook's first financial results: live - Telegraph.co.uk
• Facebook posts loss in first quarterly earnings report
• Facebook's stock tumbles after 1st public quarter
• The Only Three Things To Look For In Facebook's Earnings Report This Afternoon (FB)
• Facebook barely hits revenue mark with $1.18 billion in Q2, stock hits all time low
• Much riding on Facebook's first earnings report
• Earnings Outlook: Facebook faces low-key expectations

Google Plus Is Google's Bing

Image via CrunchBaseTechCrunch: How The IPO Ruined Google

I never thought Google Plus was going to one up Facebook. Facebook is the social king. And that will stay. Just like Google is the search king and that will stay. Facebook tried to one up FourSquare, and failed. It gave up. But Facebook can not ignore the location space, and Google can not ignore social.

But I do think Google Plus is an arrival of sorts. Google wanted a player in the social space, and now they got it. They needed an also ran, and they have it now. Google badly needed a social layer to its services, and now they got it.

Related articles

• How the IPO Ruined Google
• Search Not Dead - At Least Not For Google And Bing
• How "Facebook Search" Might Help Google Escape The Antitrust Noose
• Should We Be Talking About Google vs. Facebook Instead of Google vs. Bing?
• Facebook Promotes Bing Search Even More

• Australian Marketing Students Create "Bing Automatic" Concept To Beat Google [Video] (thetechnologycafe.com)
• Set Bing Images as your Desktop Wallpaper (labnol.org)
• Want to be found on Bing by your Facebook friends? Here's how (news.cnet.com)
• Facebook - the real coming of social search? (connect.icrossing.co.uk)
• What Google+ Should Have Been: Bing's Linked Pages (readwriteweb.com)