May 15, 2012
Facebook's public offering will be the largest and perhaps most highly anticipated Internet deal in history.
But faced with great expectations, Facebook is staring down some unnerving obstacles when it comes to key areas of monetization and growth: public distrust and display advertising apathy. According to a new AP-CNBC poll, 57% of Facebook users say they never click ads or other sponsored content when they use the site, with another 26% saying they hardly ever engage in such activity.
While the company makes money, in part, simply by displaying sponsored content, user clicks are a critical part of an advertiser's calculus when gauging how effective those ads are and how much they're willing to pay for them. In the first quarter, Facebook generated 82% of its $1.06 billion in revenue from advertising sales. In the company's online IPO pitch to retail investors, CFO David Ebersman says the company is working to make ads "more relevant, more social, and more engaging" as it looks to grow.
And while Facebook has been able to decrease its reliance on sponsored content (down from 98% of sales in 2009), the hopes of expanding the company's e-commerce footprint also faces public resistance, the poll shows. A majority of participants (54%) said they wouldn't feel safe using the platform for financial transactions like purchasing goods or services. Only 8% said they would feel extremely or very safe in doing so.
While Facebook currently has a limited market for real goods and services (most financial transactions are done for virtual goods and games), analysts cite e-commerce as an extremely lucrative, and untapped, market for the platform - and one that could be vital for the company's future growth. The public also remains wary of Facebook's valuation, widely bandied about as $100 billion, with just 3% of respondents saying they thought the company would be undervalued at such a number - half said they thought it would be overvalued (that view rises to 62% among active investors). Views are also split on whether not shares of Facebook stock would make a good investment - with progressively less positive opinions for older age groups.
The youngest respondents (age 35 and under) were most likely to say Facebook would be a good investment (59% said yes), followed by baby-boomers and Generation X-ers (55% and roughly 50% respectively), followed by seniors (only 39%). As for Mark Zuckerberg: The wunderkind CEO who turned 28 on Monday inspires somewhat tepid confidence as a leader, with only 18% of respondents saying they were extremely or very confident in his ability to run a large publically traded company like Facebook. Yet, pinning down a specific reason was difficult for respondents who neither cited his age, temperament, nor reputation as significantly affecting those abilities.
Facebook users have consistently cast a wary and suspicious eye on the platform: 59% of respondents said that they had little to no trust in Facebook to keep their information private. Yet despite those ongoing concerns, the number of users (and their engagement) continues to increase. Facebook has grown to 901 million monthly active users worldwide, with personal computer users spending 6-7 hours per month on the site (compared to just 3 minutes for Google+ users), according to recent data from ComScore. But charting a future course may prove more difficult than meets the eye for the company, according to the poll. And navigating that landscape under the daily pressures of a public company could prove even more difficult.
The AP-CNBC poll was conducted from May 3 through May 7, with a sample size of 1,004 participants ages 18 and over. The margin of error for the poll is +/- 3.9 percentage points. CNBC.com
A study of customer satisfaction at the Big 4 wireless carriers finds no significant difference between them. That's because of improvements in customer service at Sprint Nextel Corp. and AT&T Inc. The American Customer Satisfaction Index puts Sprint, AT&T, T-Mobile USA and Verizon Wireless within 2 points of each other on a 100-point scale of customer satisfaction. That's the smallest spread since the survey started looking at all four companies in 2005. It's also within the margin of error at plus or minus three points. Last year, AT&T clearly trailed the pack, while Sprint and Verizon led. That was a surprising development for Sprint, which was last as recently as four years ago. Sprint CEO Dan Hesse has made improvement in customer service central to his tenure. CBS News
An Allegheny County judge on Monday delayed the sentencing of state Sen. Jane Orie for two weeks to give attorneys on both sides time to sort out how much they think she owes in restitution for taxpayer-funded legal costs. Common Pleas Judge Jeffrey A. Manning issued a brief order delaying Orie's sentencing until June 4 "in order to provide the parties with sufficient time to prepare" for a restitution hearing. She was scheduled to be sentenced on May 21.
Orie, 50, a McCandless Republican, remains on home detention with electronic monitoring pending sentencing. Her attorney, William Costopoulos, did not return a call for comment. Last week, Manning denied a request from Orie to delay her sentencing for 60 days. A day after that denial, prosecutors filed paperwork suggesting Orie could be responsible for as much as $1.37 million in restitution for taxpayer-funded legal costs. Prosecutors asked for a hearing to determine how much the senator owes for the investigation into her use of state-paid staff for campaign work. The bulk of the public money used for legal costs in the investigation went to Philadelphia law firm Conrad O'Brien, which reported that it received about $1.3 million.
Senate Chief Clerk Russell Faber said about $229,000 -- most of it to Conrad O'Brien -- was related solely to Orie's representation. He said Conrad O'Brien's amount included the representation of the Senate Republican Caucus. Costopoulos wrote in a previous court filing that Orie plans to resign her 40th Senate District seat by May 21. A jury in March convicted Orie on 14 of 24 counts over allegations she used her Senate staff to do campaign work. A spokesman for District Attorney Stephen A. Zappala Jr. declined to comment. Pittsburgh Tribune-Review
Former Democratic state Rep. Bill DeWeese reported to the Dauphin County correctional facility on Monday to begin his 21/2- to five-year prison term. DeWeese was convicted in February on five felony counts of theft, conspiracy and conflict of interest related to his legislative staffers performing political duties during their taxpayer-funded work days. He will spend approximately four to six weeks at the Department of Corrections facility in Camp Hill, Cumberland County. From there he'll be assigned to one of the state's 26 institutions to serve his sentence.
The availability of treatment programs for behavioral or health issues, as well as educational or vocational offerings and proximity to an inmate's home community can be factors in placing prisoners, according to a department spokeswoman. The 62-year-old legislator from Waynesburg served in the state House of Representatives for 35 years, and his name remains on the fall election ballot after an uncontested win in last month's primary. Pittsburgh Post-Gazette
- Los Angeles Times: Fox isn't happy about Dish's ad-zapping Auto Hop
- Politico: Broadcasters, FCC in spectrum turf war
- Reuters: Facebook hikes IPO range to raise $12.1 billion
- Philadelphia Inquirer: Not so fast, says new filing in Voter ID suit
- Harrisburg Patriot-News: Pennsylvanians can expect heated negotiations over proposed state budget
- Scranton Times Tribune: Legal memo addresses Mellow pension fate