Wednesday, August 8, 2012

Facebook Inc (NASDAQ:FB) Snapped 2-day Rally, Lost 5.50%

Facebook Inc (NASDAQ:FB) announces the new strategy to grow its new ad products for the app developers.

The social network site has announced in a blog that it will let the app developers pay to have ads for their apps shown directly into a users’ mobile news feed. The ads will direct the users to an app store where they can purchase that ad . The charges for app developers will be on cost per click basis but later in a move to bring more revenues from the ads Facebook Inc will charge the app developers each time their app is downloaded.

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FB had in the last reported quarter posted growth in advertising revenue of 27.8% yoy on an increased ad pricing growth of 9% yoy on the ramp in Sponsored Stories and News Feed ads, which drove higher conversion.

But, the Company still could not achieve the expected ad growth (ad growth in the quarter was 18% yoy) and ad impressions continued to grow more slowly than users, largely due to increasing Facebook usage on mobile devices.

Also, with the loss of Wildfire, the preferred app developer of Facebook site, to Google last week has raised a new concern for the social network site. The preferred app developer have been developing applications for the social networking site for four years and had posted revenue leap of 300% in FY 2011.

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Shares of Facebook Inc (NASDAQ:FB) were down 5.47% at $20.72 after soaring 15% in the past two trading sessions with trading volume being 36.78 million shares.

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