Facebook's IPO Fallout Research Paper Example | Topics and Well Written Essays - 2500 words

Facebook's IPO Fallout - Research Paper Example Even though Google like companies tried to stop Facebook’s progress with the help of Google plus like social networks, such efforts impacted only moderately upon Facebook. â€Å"Between 2009 and 2010, the company's revenue nearly tripled. In the first quarter of this year, revenue climbed 44 percent. In the second quarter, Facebook Inc.'s revenue increased 32 percent to $1.18 billion from $895 million a year earlier† (â€Å"Quarter earnings: Facebook stock crashes†, n.p.) Even though Facebook’s’ progress was untroubled until recent times, some of the most recent reports show that Facebook is facing some severe problems at present. The interests of people in Facebook shares have been diminishing slowly even though the company management is working hard to bring the company back on track. Facebook investor’s concern is about the slow revenue growth of the company in recent times. Even though recession like economic problems was almost over, Fac ebook still shows no signs of revival. Analysts expect lower revenue of $1.16 billion in the fourth quarter of 2012 for Facebook (â€Å"Quarter earnings: Facebook stock crashes†, n.p.). The decline of share value of Facebook has surprised many people. Even though such a decline was expected, nobody thought that it may take place in near future itself. Plenty of reasons were cited for the unexpected and sharp decline of share value of Facebook. This paper analyses some of the major reasons of the decline of the share value of Facebook.... They do believe that the company has cheated them. In short, the reputations of the company are getting damaged as time goes on. Some analysts believe that the macroeconomic conditions in Europe are the reason for the dip in the value of Facebook shares. It is a fact that Europe is currently undergoing through a bad patch. Some of the prominent members of the EU such as Greece, Spain, Italy and Portugal are facing severe economic problems at present. Therefore, the popularity of Facebook like social networks is declining in Europe. However, there is no logic behind blaming Europe alone for the problems facing by Facebook now. In fact Facebook failed change their business strategies based on the changes in the modern world. The most important reason cited by many people for the decline of Facebook share is its failure in concentrating more on mobile advertising. It should be noted that the popularity of smartphones and tablets is growing day by day and many people have already shifted their attention from laptops and desktops to tablets and smartphones for their computing needs. In fact the number of people who access social networks through smartphones and tablets are more or less same with the number of people accessing the same with computers. Facebook failed to forecast this changing trend properly. As a result of that they failed to develop a proper mobile platform for exploiting the possibilities and opportunities. More consumers are using smartphones instead of computers to access Facebook, and the company hasn’t figured out the best way to make money from mobile ads. The result has been a slowdown in the growth rate of advertising revenue: revenue expanded by 36% last quarter, compared with 69% in 2011.New attempts to tap the mobile market are