For a record-breaker, Facebook’s long-anticipated stock market debut May 18 lacked much of the drama many had expected. Nonetheless, Facebook’s big week certainly wasn’t devoid of some surprises â€“ including an unexpected upping of its stock price, and even a new acquisition.
Yet, even as Facebook’s share price rose before its IPO, it remained rather immobile during its first day of trading. To a certain extent the company’s debut disappointed investors, as its stock price remained the same at market’s close as it did at opening.
“From a psychological perspective, Facebookâ€™s performance is a blow. The companyâ€™s bankers had to buy shares to keep the stock from falling below its offering price, raising questions about how the stock will fare next week” wrote the New York TimesÂ (NYT).
But with the surprise stock pricing of $38, Facebook left very little room for a pop,Â Dan Veru, Chief Investment Officer at Palisade Capital ManagementÂ told AdAge:
“They squeezed the lemon dry here [...] They didn’t leave enough on the table. You want to price these things a little lower, so that the shares have better support in the aftermarket.”
It is, of course, difficult to call the debut a complete disappointment. More than 566 million Facebook shares were traded, totaling $16 billion and breaking the record previously held by GM. And the company is trading at about 100 times its earnings.
AsÂ Peter Falvey, Founder of advisory firm Falvey Partners told the NYT, “If youâ€™re Facebook, it is hard to be disappointed when youâ€™re one of the 25 biggest companies in the country.”
The toll on other social networks
Of course, Facebook’s IPO doesn’t exist in a vacuum. As early as the company’s first few minute of trading, the impact on other social networks’ stock began to show, writes Mashable.
Stock price shot down by 5 percent for LinkedIn, 3.6 percent for Yelp, and for Renren by 11 percent. But Zynga seemed hardest hit, with fall of 13.3 percent to just over $7.
Among the possible reasons, TechCrunch underscores Zynga’s close dependance on Facebook:
“While we canâ€™t know the exact reason why this happened, Iâ€™d bet that investors expected Zynga shares to pop alongside Facebookâ€™s during the IPO. But when they didnâ€™t pop at all and instead stayed flat, those short-term investors sold off the social gaming companyâ€™s shares. Meanwhile, itÂ seemsÂ that other investors had been using Zynga as a proxy for Facebook stock â€” and now they can move over to buy the real thing.”
Though many companies would already feel their plate was full enough in the week of their stock market debut, Facebook apparently found the time to make another deal.Â The newly public company waited until market’s close May 18 to announce it had made a new acquisition â€“ mobile commerce startup Karma, reports the Wall Street Journal.
Karma is a service for sending gifts through mobile devices and, as TechCrunch notes, with its acquisition, “Facebook gets two extremely experienced leaders in building and monetizing mobile apps.”
And though 16 of Karma’s employees will be joining the Facebook team, TechCrunch stresses “This was a realÂ product acquisition, not a lower-priced, talent-based one.”
The issue began whenÂ hedge fund Third Point â€“ a 5.8 percent investor in Yahoo â€“Â discovered that Thompson had made false academic claims on his CV prior to taking on the role of CEO at Yahoo.
In Thompson’s stead,Â Ross Levinsohn will now be taking up the post of Interim CEO, and will in turn shoulder the burden of Yahoo’s recent troubles.
“Despite running some of the most valuable hubs on the Web, the company has struggled for years in its efforts to restore luster and revenues,” writes the New York Times‘ DealBook. “Mr. Levinsohn will be only the latest chief executive facing the tough task of figuring out how to help Yahoo catch up in important areas like mobile devices and social networking.”
To be sure, internal reorganization isn’t the best thing for a company already facing difficulty, but neither is the bad press that comes along with a CEO having lied about his credentials.
“The decision is meant to move Yahoo past one of the most embarrassing episodes in the Web pioneerâ€™s history as the company tries to revitalize itself,” writes DealBook.
Twitter takes stance on privacy with Do Not TrackÂ option
Twitter announced May 17 that it will now be supporting users’ right to privacy, with the adoption of the Do Not TrackÂ option developed by Mozilla for their browser, Mashable reported.
The feature allows users to opt out of cookies collecting personal data, as well as third party cookies, often used for targeted advertising. Though not exactly foolproof, the feature does offer some degree of privacy protection, provided the companies doing the tracking respect users’ requests not to be tracked.
Still, as the Wall Street Journal notes, “major advertisers said this year that they will begin honoring Do Not Track messages,” though it’s unclear whether doing so will prohibit the from collecting information at all, or whether they just won’t be able to see it in ad targeting.
According to Mozilla, Do Not Track is gaining support across the web, with nearly 9 percent of Firefox desktop users and 19 percent of mobile users opting-in to the feature.
Pinterest gains $100 million in funding
Pinterest, the recent darling of the social media scene, has just announced the gains from its latest round of funding â€“ $100 million.
According to the Wall Street Journal‘s AllThingsD, Tokyo-based Rakuten, the leader of Japan’s largest ecommerce, led the round. But the New York Time‘s DealBook also noted investment fromÂ Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital, none of which were first time Pinterest investors.
As a result of the new funding, Pinterest’s valuation has just increased to $1.5 billion.
AmEx launches My Offers using purchase history, location
American Express may just be the next big player in the daily deals space.
This week, the company announced the launch of its new My Offers feature, an iPhone app that serves up targeted daily deals on consumers’ location and purchase history.
According to Mashable,Â Â AmEx’s president of the U.S. Consumer Services GroupÂ Josh Silverman “acknowledged that the daily deals space â€” led by Groupon and LivingSocial â€” is crowded. But the company sees an opportunity to use its customer purchase data to come up with more relevant offers.”
It’s certainly a considerable advantage in a space where success is so dependent on targeting the right offers to the right consumers.
And, though other daily deals services, like Groupon, have attempted to gauge consumers’ preferences by asking for responses to the deals they’ve been offered, purchase history is likely to be a much more dependable indicator of users’ tastes.
Google’s new Knowledge Graph
May 16, Google launched what TechCrunch has called “one of its most ambitious and interesting updates to its search engine in recent months.”
With the introduction of its Knowledge Graph, the search giant is aiming for “smarter,” semantic search results which will intuit what a user really intends to search for. And in order to do so, Google is moving way beyond key words.
“Google is switching from simple keyword recognition to the identification of entities, nodes and relationships,” writes Mashable.
To accomplish this, the search engine is now drawing on a huge source of knowledge databases, from its own Google Maps and Google Books, to Wikipedia and even the World CIA Factbook.
“This update will have a greater initial impact than the updates that brought Google Images, videos, news and books, combined,” says Mashable. “Itâ€™s big and itâ€™s probably going to be everywhere.”
This week in marketing studies and reports:
Report: Facebook and Twitter to double ad spend by 2016
According to a report from BIA/Kelsey, reported on by Mashable, by 2016, global ad spendÂ on social media platforms will hit $9.8 billion, as compared to $3.8 billion in 2011.
The report also forecasts that ad spend on Twitter and Facebook will double by that time.
70 percent of app users don’t pay much for them
TechCrunch reported on a study this week from ABI that says roughly 70 percent of those who use mobile apps pay “either nothing or very little” for them or in them. The study chalks up the bulk of spending on or in apps to Â ”big spending ‘whales.’”
Facebook’s most engaging brands
An infographic released this week by SocialBakers listed the top brands on social media, based on engagement. Those with the most fans on Facebook ranked in the following order: Coca-Cola, Starbucks, Converse, Red Bull, and Oreo.
According to report from Nielsen, reported on by TechCrunch, the average number of app downloads by US consumers has increased by 28 percent, to 41, since last year. Four out of five of the most popular apps are Google owned.
Poll: 46 percent believe Facebook is a â€œpassing fadâ€
Mashable reported on a poll conducted byÂ Associated Press and CNBC that found that, while 43 percent of Americans believe Facebook “will likely be successful for the long haul,” the other 46 percent consider it to be a passing fad.
About Emily Wilkinson
Emily Wilkinson is a Montreal writer and editor who recently joined ReveNews.com. Her experience comes largely from her work at print publications like La Scena Musicale, where she alternated between positions as content manager, copy editor and journalist.
She believes in the importance of strong writing, be it in journalism or in other media, like blogging or even social networking. Her prerogative: though language will and ought to evolve, a good writer need never sacrifice the communicative power of text that is written with thought and care, whatever the venue.
Find Emily on Twitter @EditorWilkinson