Best of the Week
Most Popular
1.A 'Wicked Rally' in Gold Price Predicted - The_Gold_Report
2.Gold and Silver Bullion Buying Opportunity for 2017? - Nadeem_Walayat
3.The Coming Stock Market Crash and WWIII - Brad_Gudgeon
4.First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - Nadeem_Walayat
5.Trump Sets The Stage For A Huge Gold Rally In 2017 - James Burgess
6.Why We Haven’t Seen Gold Price Rally after Trump Victory - Harry_Dent
7.Silver Bullion Price Buying Opportunity for 2017? - Nadeem_Walayat
8.Trump Stocks Bull Market Furious Rally Towards Dow 20k as Bear Mantra Persists - Nadeem_Walayat
9.Gold Bullion Price Buying Opportunity for 2017? - Nadeem_Walayat
10.Trump's Presidency - Stock Market Crash or Start of New Mega-Trends - Sol_Palha
Last 7 days
Official Warning: Stocks Are Going to Crash - 10th Dec 16
CIA Warns Donald Trump is Putin's Manchurian Candidate! - 10th Dec 16
Gold Fools, US Dollar Bulls and The Long Term Outlook for Both Markets - 10th Dec 16
Stock Market Saeculum 1st Turning Underway - 10th Dec 16
India's Stock Market: Nothing "Random" About It - 9th Dec 16
Gold Futures Selling Exhausting - 9th Dec 16
Cheap Large Icicle Christmas LED Lights Review - B&M Stores - 9th Dec 16
US Interest Rates and the Toughest Man Who Ever Lived - 9th Dec 16
Amazon UK Christmas Shopping Useless Delivery Tracking Warning Alert - 9th Dec 16
Euro-zone Crisis - The Soon To Erupt Euro Experiment - 9th Dec 16
Global Market Perspective 3 Killer Charts, 2 Fast Looks at Politics - 9th Dec 16
Trump Could Fuel A Nuclear Energy Boom In 2017 - 8th Dec 16
Our Future Economy, Jobs, Banking, And Governance – Part2 - 8th Dec 16
Developing Knowledge-Intensive Society and Knowledge Industrial Hub in Kerala - 8th Dec 16
Crude Oil and Gold, Silver Precious Metals Link - 8th Dec 16
Stock Market and the Great Middle Class Revolt Gets Bigger - 8th Dec 16
Protectionist Trump Policies To Crash Dollar, Gold and Bitcoin to Soar - 8th Dec 16
The Jaws of Life : The Most Hated Stocks Bull Market in History! - 8th Dec 16
Infrastructure A Budding Asset Class - 8th Dec 16
Trump Stocks Bull Market Furious Rally Towards Dow 20k as Bear Mantra Persists - 8th Dec 16
More Talk About More Economic Growth and More Globalization - 7th Dec 16
Cracks In US Treasury Bond Market, The Japanese Factor - 7th Dec 16
The Rise of Anti-Establishment Italy - 7th Dec 16
Trump Likely to Drive Another Bump in Stock Market Buybacks — Here’s How to Hedge - 7th Dec 16
World War II and the Origins of American Unease - 7th Dec 16
Online CFD Trading for Traders on a Budget - 7th Dec 16
Silver Bullion Price Buying Opportunity for 2017? - 7th Dec 16
The Imminent Multi-Trillion Dollar Surge In Social Security & Medicare Costs - 7th Dec 16
Gold Bullion Price Buying Opportunity for 2017? - 6th Dec 16
Shariah Gold Standard Approved for $2 Trillion Islamic Finance Market - 6th Dec 16
THE Gold Play for 2017 - 6th Dec 16
Trump Sets The Stage For A Huge Gold Rally In 2017 - 6th Dec 16
BrExit Tsunami Claims Emperor Renzi's Scalp, Counting Down to End of the EU, Next? - 6th Dec 16
Failed EU - Means an Expanded Dictatorship - 6th Dec 16
Crude Oil Prices: "Random"? Hardly - 5th Dec 16
The Coming Stock Market Crash and WWIII - 5th Dec 16
This Past Week in Gold Market - 5th Dec 16
Stock Market Short-Term Correction Underway - 5th Dec 16
If Trump Doesn’t Do This, We Will Have the Great Depression 2.0 - 5th Dec 16
India’s Demonetization Could Be the First Cash Domino to Fall - 5th Dec 16
Our Future Economy, Jobs, Banking, And Governance - 5th Dec 16
Gold and Silver Bullion Buying Opportunity for 2017? - 4th Dec 16
First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - 3rd Dec 16
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

Facebook's Mobile Revenues Strategy in Trouble

Companies / Tech Stocks Nov 16, 2012 - 07:27 AM GMT

By: Janet_Tavakoli

Companies

In its last earnings report Facebook touted its mobile revenues strategy--a strategy that it said depends on "sponsored stories"--as the answer to its loss on a GAAP basis (the accounting benchmark for U.S. corporations), declining margins, and sharp decline in revenues from Zynga's games, once 12% of its revenues.


But a pending court ruling puts its entire mobile strategy in question, because Facebook will have to give adults the option of opting out of sponsored stories after pressure from a class action suit by consumer privacy protection groups.

Reuters' Dan Levine just reported that U.S. District Judge Richard Seeborg would "very shortly" rule on the revised settlement Facebook was required to submit after he rejected its earlier proposal this year. The problem is that, among other things, Facebook's "sponsored stories" violated California law. Users' "likes" were being used without compensation to anyone but Facebook, and users had no way to opt-out. Never mind the problems Facebook has in Europe, where privacy laws are much more stringent.

As part of the settlement, Facebook said it would engineer a tool so users can view any content already displayed in "sponsored stories," and users could then opt out. Advocacy groups want an even stronger deal, because children shouldn't have to opt-out; they should only be able to opt-in and then only with parental consent.

The problem all along is that what Facebook claimed were "sponsored stories" were actually hijacked by Facebook when users merely "liked" a product. Users were unaware that years later this seeming innocuous action could result in Facebook using this as an endorsement in advertising without compensating them. Moreover, at the time users expressed no wish to make their preferences public as a "sponsored story."

Dallas Mavericks and Other Brands Saying Goodbye to Facebook

Perhaps Facebook's new strategy of asking companies to pay up to "promote" posts to fans will bail Facebook out? It doesn't seem that way, since advertisers, already suspicious of bot-clicks on ads, are now irate due to their suspicion that Facebook is suppressing their posts in order to cyber-blackmail them into paying so that fans can read those posts. Whether the advertisers are correct--and it appears they are--or not isn't the issue any more, because they are leaving.

Previously I wrote about an advertiser that left when it discovered it was being charged for bot clicks (it was not accusing Facebook of being the perpetrator, it could have been a third-party infiltrator). Earlier this week, Dan Lyons at Readwrite reported that billionaire Marc Cuban is pulling the Dallas Mavericks and 70 of his other companies off of Facebook, after Facebook asked him to pay $3,000 to reach 1 million of his fans. Cuban did a screen grab of Facebook's "offer," and said that while earlier he only considered moving, now he's actually doing it. Facebook said it wasn't a shakedown, Cuban obviously disagrees.

Facebook Revenues?

Facebook may see increased revenues from campaign spending when it reports fourth quarter earnings, but the bad news for shareholders is that it will likely be eaten up by its huge tax liability from handing out shares as compensation to employees. Now the future of its web-based advertising and its mobile revenue strategy is in question. Meanwhile, its costs to bring in new users has risen, and it isn't generating anywhere near the revenues it thought it would from many of the "emerging" countries it courted. It's also still blocked in China.

Disclosure: I'm long puts on Facebook

By Janet Tavakoli

web site: www.tavakolistructuredfinance.com

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct associate professor of derivatives at the University of Chicago's Graduate School of Business. Author of: Credit Derivatives & Synthetic Structures (1998, 2001), Collateralized Debt Obligations & Structured Finance (2003), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, September 2008). Tavakoli’s book on the causes of the global financial meltdown and how to fix it is: Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (Wiley, 2009).

© 2012 Copyright Janet Tavakoli- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife