Facebook Now Second for Videos, Still has Serious Problems

Once again, the week’s news begins with Facebook. Expect it to be continually making news throughout the week as well. However, the social networking site of 900-plus million users actually has some good news today. Of course, there’s a lot more bad news out there (and to come), but let’s take a look at the good news first.

Facebook Beats Yahoo

Yesterday, Mashable reported, “Facebook has overtaken Yahoo as the Internet’s most popular site for viewing video last month.” In terms of numbers, it wasn’t a dominating victory, but moving to second place in the market is always better than remaining stuck or falling. Facebook clocked in “a bit more than 53 million unique viewers throughout July, compared to Yahoo’s less than 49 million.”

Ultimately, Google holds a commanding lead in the online video market, thanks to YouTube. Google had close to 157 million unique viewers for July. Even though less videos for less time were watched on Facebook, it’s still important that the company managed to get more unique viewers. What Facebook does with this information remains to be seen.

The company isn’t exactly known for its ability to promote advertising on its video platform. With a potential market of 900 million users, one would think more of a push would be made to implement ads or some sort of revenue-generating function to Facebook’s videos. As of now, I’m unaware of anything like this. Of course, this just plays back into the rough few weeks Facebook has had. Unfortunately, bad news is likely to plague the company this week as well.

Facebook Stock Failing

Facebook’s stock ended Friday at half of its original value during its IPO—down to $19 from $38. Wall Street and other investors are getting so concerned that some discussion is even being made about firing Mark Zuckerberg, Facebook’s founder and inventor.

Swartz and Martin, with USA Today, report the precedent is that “Apple and Yahoo eventually pushed aside founders in favor of adult supervision before bringing their founders back.” But it remains likely that Zuckerberg will stay on. He and other executives are reported to have been finally addressing the employees at Facebook about the issue.

Ryan Tate, with Wired, writes that Facebook “has had to let go of the fantasy that it could take Wall Street’s money and not pay attention to Wall Street.” Now the company is left with “an uncomfortable choice between accepting those costs or trying to impress investors by getting more aggressive with its advertising.”

Bumpy Road Ahead

Facebook definitely has to tread carefully during the next few weeks and months. There’s no reason that their stock cannot fall lower. It certainly can. The company is not financially in trouble, just in trouble with Wall Street. On top of all of this, a judge recently rejected a settlement in a case based on its use of sponsored stories.  This is another setback for the company.

Facebook still has plenty of opportunity to improve its ability to advertise to its huge user-base. It’s just a matter of them figuring out what works best for their platform. Until then, expect to see the company go through many ups and downs, especially with regards to Wall Street.

Do you think Facebook will weather this rough patch? Do you think advertising on Facebook is worth it?

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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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