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May 16, 2012

Facebook's Greatest Weakness is Mobile Advertising

By Julie Griffin, Contributing Writer

Despite Facebook’s (News - Alert) team of geniuses, the company has not kept up with the fast pace of advertising in the mobile industry, and analysts believe that their mobile shortcomings are a significant weakness for a company approaching its IPO. The company has made some drastic changes to their mobile application in a desperate attempt to tackle these issues before the offering. The latest announcement, to hire the Lightbox staff, will hopefully yield some quick results.

L.A. Times reports that just two months ago, Facebook incorporated, “Sponsored Stories” into their mobile application and have just barely started collecting mobile revenue. Instagram, which was last month’s $1 billion investment, has not yet demonstrated profitable results. The company collected $3.1 billion last year from ads viewed from a laptop or desktop, but this information only increases frustration analysts have with Facebook, a company that has more than 50 percent of its users logging in from smartphones and tablets. To many, the decision to improve mobile advertising is rather late in the game.

Matt Brezina, “a Silicon Valley entrepreneur,” tells the L.A. Times, “Mobile is everything these days. People check their phones before they go to bed, after they wake up, and while their waiting for the bus to take them to work.” Other experts agree that Facebook is not delivering as it should if it recognizes the power of the mobile market.

Experts state that the most obvious reason Facebook’s mobile ads are ineffective is because they haven’t adapted the graphics to mobile devices, so ads are difficult to read. Facebook has made changes that include increasing ad imagery by three times the original size and incorporating Instagram to improve photo-sharing abilities.

Lightbox provides solutions that transition high-resolution images to mobile. Hiring Lightbox’s staff is a strategy to further improve Facebook’s mobile advertising capabilities. If Lightbox is really the ultimate answer, then this news is too bad for Google, because the company announced that it must sever all ties with Android (News - Alert) users by June 15th.

Edited by Rich Steeves
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