It’s early on the West Coast, but we’d believe that Facebook executives Sheryl Sandberg and Mark Zuckerberg are having a hard time sleeping.Facebook reports its third-quarter earnings this afternoon just after 4pm eastern.
It’s a huge moment for the company.
Facebook went public in May at a $100 billion valuation.
Now it’s worth $50 billion.
There is one basic reason why: Facebook revenue growth has decelerated for the last several quarters.
This is a disastrous trend for a company that was pitched to the public markets as the next Google.
Analysts, such as Scott Devitt over at Morgan Stanley, have come up with all sorts of questions Facebook needs to answer with its report this afternoon.
They want to know if Facebook mobile ads are performing. They’re asking about the pricing impact of the Facebook Exchange, which allows ad-buyers to buy Facebook inventory using their own data. Analysts want to know if Facebook will begin selling its own data soon. These are are important details, for sure.
But truly, they all boil down to one thing: Did Facebook re-accelerate its revenues during the third quarter, or not?
If the answer is yes – as many analysts believe it will be – then Facebook might impress the open market as much as its social network rival, LinkedIn, which has also faced deceleration, but at a much slower, healthier rate.
If the answer is no, then Facebook is going to keep getting beaten up.