Facebook Goes Public
Beloved social network Facebook went public early last Friday, shortly after the NASDAQ stock exchange opened.
Facebook set their opening price at $38 and the price quickly rose quickly until around 2 p.m. when the stock began to fall. The stock finished the day at a mere $38.23, only up .61%. The company will is running under the ticker symbol of “FB”.
The company held the largest initial public offering (IPO) in tech history and was the third largest of all time.
The offering opened after worries about the revenue that Facebook receives from advertisements on its site. Facebook is currently struggling to implement a mobile advertising platform and companies are beginning to question whether or not Facebook ads are worth the money that they cost.
Facebook is not expected to face trouble finding demand for ad space any time in the immediate future it is in question as to if they can keep a long term advertising base. GM pulled all of its Facebook advertisements, siting that the ads were having little to no impact and weren’t worth the money that they cost. GM is the third largest advertiser in the nation and their departure may influence others to leave the site.
NPR ran a story last week about a small pizza parlor in New Orleans that was struggling to stay open, so it bought some Facebook advertising to boost business. The owners noticed that their facebook page’s activity greatly increased, picking up a number of new fans (see graph below).
The ad campaign cost them $240, which equals out to about $1 for each new fan they got during the campaign. As customers came into the joint to pick up a pizza, the owners would always ask where they heard about the place: not one person said Facebook. About a week later they received a call from a man offering them $10 to help get their business started up.
The owners estimate that this donation was the only real return on their investment. $10 out of a $240 ad campaign. Was that really worth it?
While questions remain about Facebook’s long term profitability, it sure did boost up some of the Facebook elite. Mark Zuckerburg increased his net worth to over 3o million dollars. Many top Facebook employees made thousands, if not millions, on the event, creating several new millionaires, and even a couple new multi-millionaires.
