Don’t Pay Any Attention To Facebook’s Q2 Earnings Report

From my Forbes.com blog The New Persuaders:

To hear almost everyone tell it, Facebook’s earnings results Thursday will be a huge test of whether it will become the blockbuster business success so many investors have bet on. “Facebook Efforts on Advertising Face a Day of Judgment,” intones the New York Times. “Big financial test for Facebook,” blares the dead-tree version of the hometown Mercury News. “There is a lot on the line,” writes the Wall Street Journal.

It’s all a crock. Manufactured journalistic drama. Not that any quarter for such a fast-growing, newly public, highly influential, and closely watched company is unimportant. Of course it’s important. Especially given the underwhelming IPO, investors have a right to information that might tell them if their shares will be heading up or down.

But this won’t be a bellwether for Facebook’s long-term future. Fact is, no one should look to this quarter, or even the next, to determine whether Facebook can fulfill expectations that it will become the next Google.

Why? Because it’s too early. Way too early. Nobody, probably including Facebook, yet knows for sure what kind of advertising and marketing works at large scale in social networking. Facebook is clearly experimenting with a variety of ad formats, such as its socially infused Sponsored Stories. Just as clearly, it’s not apparent that it has found its equivalent of Google’s search ad or television’s 30-second spot. …

Read the complete post at The New Persuaders.

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