Facebook announced their Q2 earnings this evening at 5:00pm, New York time, via conference call with shareholders. The social media firm was expected to announce earnings of $0.12 per share on revenues of $1.16 billion. Facebook announced earnings of $0.12 per share on revenues of $1.18 billion which was in-line with analysts’ expectations, however their stock price is down more than 11 percent in after-hours trading.
Kenneth Wisnefski, founder and CEO of WebiMax, visited with Bloomberg today and spoke with Mark Crumpton, on his show The Bottom Line. Wisnefski, a social media expert and serial web entrepreneur, told Crumpton “Facebook’s growth is slowing down and investors are meeting it with a lot of distrust at this point.”
Facebook spent approximately $1.93 billion during the quarter, as the company continues to invest heavily in recruiting key talent, research and development, and reinvesting in current technology. As of today, the company employs slightly less than 4,000 employees.
“There is a lot of concern with advertisers right now that they are not seeing the type of return that they would like to see from Facebook,” states Wisnefski. “Advertisers have thus started to shy away from it.”
Facebook indicated that advertising revenue accounts for 85 percent of overall revenues.
While Q2 was in line with analysts’ expectations, investors were looking for more from Facebook, including a significant increase in revenues and earnings per share. The in-line results have sent the stock to an all new low since going public in March.
Wisnefski argues that Q3 should be a profitable and successful quarter as there are multiple products the company is rolling out that has not had enough time to mature at this point.
“Facebook launched mobile ads this quarter and are still in the introduction phase of the product life-cycle,” states Wisnefski. “Sponsored Stories (as they are labeled), are posts and other actions by brands and consumers that are promoted by a brand. Sponsored Stories have been effective to this point, as they have a click-through rate of 1.14 percent, almost double the rate of .59 percent for ads in the news feed of desktop users. In addition, the click-through rate for Sponsored Stories was 53 percent higher than standard ads.”
Facebook faces significant challenges ahead, none more than convincing marketers and advertisers that advertising on the social media platform has its benefits and generates a return for advertisers.
Wisnefski concluded his conversation with Crumpton with the following thought “I think Q3 stands to be better than Q2, as now the company is in position to start showing some value.”
Kenneth C. Wisnefski, a serial web Entrepreneur, discusses the American Jobs Act and its role in helping to curve the 9.1% unemployment rate. Wisnefski, a small business owner, leads WebiMax as the #1 rated search engine optimization firm in the United States. He defends the Act stating “President Obama is taking necessary steps to force congress to act now before America continues its downtrend in economic uncertainty”, and further states “businesses both small and large are reluctant to head forward due to their hesitancy to adapt to change”.
President Obama, in a speech to a joint session of congress and a struggling nation, called upon legislators to start acting now, before the country slips into further economic uncertainty. The proposed $447 billion jobs package offers tax incentives to small businesses that hire and provide raises to their personnel. The Act also discusses the vital role that small businesses and Entrepreneurs play in the recovery.
“Small businesses and the private sector can help lead the United States back to lower unemployment”, states Wisnefski, an Entrepreneur on his 3rd profitable startup since 2001. “As a small business owner, we all have the duty to continue to hire U.S. citizens and keep American workers at home”.
There are some additional roadblocks, however, that Wisnefski states hinders many businesses from hiring.
“Many small businesses have not adapted to change and wonder why their revenue is falling”, exclaims Wisnefski. “Social Media is replacing traditional communication and marketing tactics. Online advertising and pay per click management services are replacing outdated methods of advertising on a billboard. Who is growing faster, AT&T, or Facebook?”
Innovating and adapting are the most crucial elements to growing a business at present.
“At WebiMax, we saw the change in dynamics several years ago and leveraged search engine optimization, social media, ecommerce, and other online marketing services to launch off our pad in 2008 to become one of America’s fastest growing companies. Our revenue is up 15,000% since our inception in 2008 and we employ over 150 staff (up from 4 at start), all because our products are in high demand by companies adapting to the change”, states Wisnefski.
President Obama also stated that the Act will cut payroll taxes in half in 2012 for small businesses that hire. In addition, he stated that the Act will provide a jolt to an economy that needs to be restarted.
“I applaud The President’s intent and willingness to do what he can but ultimately this requires much more. The ‘jolt’ that the U.S. economy needs is also for Entrepreneurs and small business owners to focus on what they can do internally to grow their business. At WebiMax, we took highly skilled and talented candidates and trained them in to the roles that we needed filled. Although the American Jobs Act certainly provides financial incentives to businesses, I feel companies need to continue to evaluate how they can improve their position, innovate, and push forward”, concludes Wisnefski.