Look At The Wall of Media Negativity Facebook Faces In Q2 Earnings Runup

Mark Zuckerberg FacebookFacebook CEO Mark Zuckerberg.

Photo: KK+

Facebook faces a wall of doubt in the media on the eve of its first post-IPO quarterly earnings call. It’s almost as if the business press has decided that the social network  will post a huge miss on Thursday, July 26, when Facebook reports its Q2 2012 earnings.Here’s a sampling:

The Daily Mail—in an unsourced, unexplained article—is taking the most negative line, saying Facebook will report “losses”:

Facebook is expected to post losses when it declares its first quarterly earnings this week since going public.

The story doesn’t explain its argument. A literal net loss on the bottom line would be a surprise of tectonic proportions.

The New York Times suggested that—despite posting $1 billion in Q1 revenues—the jury is still out on whether Facebook is a “thing” or not:

“Advertisers need more proof that actual advertising on Facebook offers a return on investment,” said Debra Aho Williamson, an analyst with the market research firm eMarketer. “There is such disagreement over whether Facebook is the next big thing on the Internet or whether it’s going to fail miserably.”

The Wall Street Journal floated the ever-omninous “questions over its online advertising business“:

There is a lot on the line for the Menlo Park, Calif., social network, especially after the company’s disappointing initial public offering in May and continued questions over its online advertising business and mobile strategies. Wall Street will be looking closely at the company’s earnings report to see if Facebook can answer those concerns.

And Bloomberg quoted Baruch Lev, a professor at New York University Stern School of Business, who discussed the worst-case scenario for Thursday: 

“The worst thing that can be done on a conference call is to disregard the past — and just speak about castles in the air: ‘We expect this. We look forward to a great future,'” said Lev, who is based in New York. “Just baseless optimism and hype is the worst thing, particularly when there is uncertainty, like in the case of Facebook.”

Meanwhile, Facebook continues rolling out new revenue-bearing products: Sponsored search results are its latest. They follow off-site sharing ads, a new real-time bidding ad exchange, mobile-only sponsored stories, and paid post “highlight” promotions, which have all come in the last few months.

Disclosure: The author owns 30 shares of Facebook stock.


  • FACEBOOK Q2 REVENUE PREVIEW: Prices and Performance Up, And Bad News For Twitter

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.