After Months of Expansion, Facebook Rebuffed as Stocks Drop
After a shopping spree that lasted for months, stockholders seem to be signalling that its time Facebook and CEO Mark Zuckerberg give expansion a rest for a while. After dropping $19 billion for mobile messaging service WhatsApp in February, $2 billion for untested augmented and virtual reality company Oculus Rift in March, and $20 million for Ascenta, a drone maker, stocks showed that investors might believe the social media behemoth has finally spread itself too thin. At the close of the NASDAQ on Monday, Facebook saw share values drop by a staggering 5.3%. All of this comes as a sober reminder that no matter how hard Zuckerberg might want it, Facebook is no Google.
The Service Has Certainly Found Success of Late
This isn’t to say that Facebook hasn’t had success so far in 2014. After upgrading its news feed service in hopes of better competing with rivals Twitter and Google News, many industry insiders, including Forbes, are waiting for the day when Facebook’s increasingly used, increasingly intelligent news feed service finally overtakes its main competitors.
Making its intent to push further into the mobile world clear, the company launched ‘Paper,’ a news conglomerating reader that has been an astounding success, in February. On average, Paper users are reading 80 articles a day in the application. While the skies certainly aren’t clear for Facebook going forward, Paper, at least, shows that despite shaky stock numbers, the tech giant is a long way from being out of the race.
Despite Industry Footprint, Many Remain Loath to Work with Facebook
The problem with Facebook, as made clear by its stock dip, is that the company wants to be too big, do too much, far too quickly. Zuckerberg and the gang want to have the reach in the hardware and software world that Google and Apple have been enjoying for years. Unfortunately, many developers don’t find the prospect too appealing, and that might hurt the company’s ability to continue as a huge marketing platform in the future.
“I think that Facebook needs to concentrate on what it was built on in the first place,” says Brandon Cabwell, Director of Web Technology at Archer Communications, Inc. “It needs to focus on its core product rather than trying to be like Amazon and sacrificing what it’s known for.”
Take Huuuge Inc., for example: the Helsinki-based game developer is well-known for its Monster Shooter app. Looking to expand its reach in the mobile sphere, Facebook contacted Anton Gauffin, the company’s founder and executive chairman, in hopes of forming a developer contract. The response? Gauffin turned them down. In a subsequent interview with Bloomberg, he outlined the problem that Facebook is facing across the board. “I don’t think developers really see Facebook as a tool or provider of help for developers,” Gauffin said.
In short, no matter how much Facebook expands its menagerie of umbrella companies, until it makes an effort to form mutually beneficial relationships with potential partners, partners who can bring them forward in an increasingly mobile world, its stocks, ability to meet marketer needs, and overall industry reputation will continue to be called into question.