It's ok, Facebook is not sinking, put down the lifejacket

by Jason Keath on May 17, 2012
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I suppose when the biggest tech IPO ever comes along, haters gonna hate.

I didn’t get a ticket into the secret room where everyone get’s to buy golden shares of Facebook either. But throwing stones at Facebook feels a bit premature.

It seems like everyone and their mother, and by that I mainly mean the Wall Street Journal, is laying out the case for why Facebook is a sinking ship.

That Mark Zuckberg and his hoodie don’t know the first thing about building a 1 billion person social network.

That we have all been fooled these past several years into believing that we should log into Facebook every day.

That entire demographics use Facebook as a primary social and communication center.

Thank goodness for these great journalistic exposes to help us see the light.

GM and Their Ever Loving Facebook Ads

Yes, GM is pulling their Facebook ad budget. Guess what? Companies pull ad budgets. A lot. Pepsi pulled all their TV ads last year in favor of digital spend. Companies experiment. And they should.

Especially when they are tightening their belt. Earlier this year, GM said it would review its advertising budgets to save $2 billion over the next 5 years. I suppose this gets them 1/40th of the way there.

PS. They also pulled their ads from Yahoo News, the largest online news portal. It feels to me like they were looking for a few large buckets to empty across the web. But who knows. It is probably just a sign that Facebook is dying. Oh yeah, except that GM is still keeping the rest of their Facebook budget, 75% to be exact.

So maybe they just need a new Facebook ad agency?

Can I Get A Few Sides Of Doomsday with my Apocalypse?

But wait, there’s more.

Facebook has no idea how to monetize mobile.

And Facebook’s stock price is going to bottom out, never reaching the epic predictions.

And Facebook pages don’t really work.

Here’s the thing. As the world keeps on a spinning, we all keep using Facebook. And Facebook continues to innovate, unlike it’s predecessors. These two facts alone create a strong business.

Other Refuting From A Smart Cat

But let’s get more specific. Justin Kistner chimed in on these same points yesterday over at VentureBeat.

Here is a breakdown of all the attacks he has seen against Facebook with Kistner’s thoughts of why we should all just chill out a little. Read his full take via the link above.

1. Facebook And Mobile

Kistner rightfully points out that no one understands mobile yet. Mobile ads are not just absent on Facebook mobile, they really do not do well anywhere yet.

And Facebook is poised to move quickly on the mobile front. See the Facebook App Center as well as their recent purchases of Instagram and Glancee.

2. Facebook Ads 

Facebook is just getting started when it comes to ads. They are maturing their product have a lot of untapped potential.

Kistner points to one example. Facebook sends one ad per day per user into the newsfeed right now. A cautious step for sure. If they add one more ad in the newsfeed each day, they have a potential $3.6 billion in added revenue. Or approx. 60% of their total projected 2012 revenue.

Facebook also has untapped ad potential on mobile and off of with a Google Adsense style display network.

3. Facebook Credits

Kistner points out that Google has never made any money from anything but ads to date. While Facebook is already making 15% of revenue from credits. For games mostly. Come to think of it, Facebook does have those little Facebook Credits gift cards in every Walgreens I walk into.

4. Asia

I’ll add one more small detail under the column of Facebook’s potential and future growth.


Namely China and India.

Facebook seems to be reaching audience saturation in countries when about 50% of the country is on board. In India, 3% are on Facebook. In China less than 1%.

China alone has more people online that the US has people. These are challenges, yes, but Zuckerberg didn’t learn Chinese for nothing.


Post Author

CEO and founder of Social Fresh, the social media education company. Jason is a social media consultant, a social media speaker and industry analyst. He consults with corporations and agencies on social media strategy, building community, and influencer...

  • Lynn

    Good article, but was it totally necessary to use a picture of the Costa Concordia disaster? Lives were lost…

  • Interesting to see how quickly people turn to doubt Facebook. It has 900 million users and grows everyday. People don’t “like” Facebook, the “LOVE” Facebook. It is an addiction that will not change soon.

  • I don’t believe Jason meant any harm or anything by using the photo Lynn.

  •  Great post Jason. Yes, people tend to prejudge things very early and judge it very wrongly too…

  • Thank you, Jason!

  • Great Post Jason and Its really amazing to know people disgrating facebook, I think facebook have been provided great opportunity through business page facility but people still hating it, that’s hard to understand.

  • Jennifer Agrazada-Schreiner

    Looking forward to the growth of Facebook in China, what with the strict policies there…hmmm…