Can facebook justify its valuation in the coming days or quarters. After going public it will now face expectations from investor of increasing revenues quarter by quarter.... can Facebook attract enough advertising revenue to justify that exhorbitant valuation
One way to increase revenue is to expand the ability for users to listen to and watch content inside of Facebook, using tools that third-party companies build. In turn it can charge the companies for the access. This will keep the users glued to facebook increasing the potential of ad reveunes.
The stock is trading below the offer price. As considered by many its valuation was very high. These days, lot of social media start ups are getting unrealistic valuations. Its a kind of soft bubble which is getting created similat to dot com bubble of 2000s
The most important question is whether Facebook can adapt to fast changing new world of mobile computing. Facebook has little advertising on its mobile site, so its revenues could be hit if many more people access it on their phones
FB is down nearly 24% from the IPO price and investors should be responsible for their own investment decisions. There has been no new information which has come to the fore. Hence some of the investors did not value the assets correctly