Facebook’s First Earnings Report
Will Facebook eventually live up to the hype and monetize its user base of over 900 million people who spend, on average, 20 minutes a day on the social network website? Today could be telling since this will be the first time the company has reported its earnings to Wall Street as a public company. After Facebook’s fiasco of an IPO on May 18th of this year, many investors and analysts alike are questioning how the company can create a viable business model.
One specter looming over the company’s fate is Zynga’s disappointing 2nd quarter earnings released yesterday. The online social game provider whose IPO in December at $10 a share has precipitously dropped to $3 a share. Zynga provides games for Facebook users and is one of its largest money makers.
Facebook will likely report earnings below expectations, which are expected anyway, and therefore cause a minor, if any, uproar in Wall Street. Still, the company has great prospects because of its growing user base although reports show it tapering off. In the long run, the company should be able to more and more capitalize on its audience. It will just take time.