Facebook must be doing something right as shares are going up

Remember the IPO price of Facebook? It was $38.00 per share. At one time the price dropped until $25.87 per share. Things are definitely not going so well for Facebook back then. It was challenging for Facebook to convince investors that the online social network can actually makes money. After few months of struggling, Facebook’s share seems to going back up again. Although the price is at $31.36 per share as I’m writing this post, it is still a long way before reaching $38.00 per share. This shows that Facebook has been taking some actions to pull back the price of the share and it works. And it is a good sign for Facebook.

One of the reasons behind is the success of Facebook mobile ads. It seems like Facebook has been making more money via mobile ads compare to desktop ads. Check out the blog post title “They Work! Facebook Mobile Ads Are Clicked 13X More, Earn 11X More Money Than Its Desktop Ads” from Techcrunch and “Facebook Mobile Ads Earn 2.5 Times More Than Desktop Ads, Studies Find” from Mashable.

Is this good enough to pull Facebook’s share back to $38 per share? Well, I think it is still too early to tell. There are lots of advertisers who are interested in Facebook mobile ads. Advertisers are hoping that Facebook mobile ads can help bring in more businesses and revenue. So it is natural to see clicks increases. But at this stage, Facebook is the only one who is making money. In order to continue making money and keep increasing revenue, Facebook has to make sure that advertisers are actually making money from those clicks. In other words, Facebook has to make sure that those clicks convert to businesses and deals for advertisers.

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