James McRoy

Member Article

Facebook ‘Unfriends’ Nasdaq in Fallout over IPO Fiasco

Facebook ’Unfriends’ Nasdaq in Fallout over IPO Fiasco – and Looks for More Revenue Opportunities

Facebook is starting to ramp up its revenue –driving activities since the IPO fiasco that saw the share price drop below the issue price in a very short space of time. The Facebook shares opened at $38.00 before dropping to a low of $25.00. The current price is hovering at £31.00 pointing to big losses for early investors.

The fallout of the botched IPO is far-reaching, with Nasdaq’s reputation being hardest hit.

For years, the exchange, considered friendly to start-ups, was the preferred place for emerging technology companies. Now, Nasdaq, the first electronic stock market, is trying to salvage its reputation with Facebook and the rest of Silicon Valley while also fending off the advances of its archrival, the New York Stock Exchange, which is gearing up for a major assault on Nasdaq territory.

Recently the rift between Nasdaq and Facebook has deepened, with both companies facing lawsuits from shareholders over the losses incurred due the mishandling of the launch and the aggressive reporting of the comapny prospects.

Facebook is reputedly upset about Nasdaq’s lack of communication, according to people close to the company , with executives at the social media giant perplexed by Nasdaq’s technology problems that arose at the IPO launch.

Perhaps the tipping point for the split between the two companies was the comment by Nasdaq’s head Mr Greifield to the assembled press shortly after the launch that Nasdaq’s failings did not contribute to the stock’s performance.

The fallout is considerable with Facebook considering switching exchanges from Nasdaq according to insider sources.

Facebook are now focusing on more revenue opportunities, mounting a campaign to encourage businesses to advertise on their pages with free vouchers and a mechanism to enable users to pay for an individual post to be seen in more of your fans’ news feeds - the Promoted Post. You may have noticed the new metric Facebook has on the bottom of every post showing how many people it reached.

It is a little-known fact that Facebook posts were always only seen by a portion of your audience due to the fact that people may not be on Facebook at the time of your post or because your fans may have a lot of friends and pages, which suppresses the posts shown in their news feed.

EdgeRank is Facebook’s news feed algorithm for determining what is shown to people based on weight, affinity and time.

The Promoted Post facility is a method of pushing postsmore prominently into people’s news feeds.

Facebook estimates that currently, only around 16% of people who ‘like’ your page will actually see the content you post on their own News Feed, due to the nature of EdgeRank. By paying for a Promoted Post the idea is that your gems of wisdom will be seen by a larger audience, increasing the probability of more visits to the Page.

There are certain aspects that should be considered if you decide to go down this route and certain limitations as to who can use it. For starters, promoted posts are only available to Pages that have more than 400 likes – and only in certain countries (the UK is one of them!) In addition, Promoted Posts must be newer than 3 days old, with the post being submitted to the newsfeeds of fans for three days from the campaign start date.

In recent tests, it seems that the ‘fun’ Promoted Posts outclick ‘sales-orientated’ posts two to one, so if you intend to try this out and want to increase the engagement with your fans, add an element of fun into your posting.

You can turn these campaigns off at will, should your idea not prove responsive to your audience, but in the long run only time will tell if this is a wise marketing spend or just a passing fad.

With the Facebook/Apple alliance starting to form and Google’s aggregating of its assets under the Google+ platform, the battle for online ad revenues is just beginning.

The online marketing landscape is cloudier than ever and with the advent of the post-pc era, mobile devices and their strategic alliances will hold the key to the winners and losers in this ever more complex game.

This was posted in Bdaily's Members' News section by James McRoy .

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