Poof! $1 Billion Vanishes From 2012 Facebook Revenue Forecast

From my Forbes.com blog The New Persuaders:

Facebook’s revenues, particularly from advertising, won’t grow as fast as expected this year, according to a revised forecast from market researcher eMarketer.

EMarketer today said the No. 1 social network will just break $5 billion in revenues this year, with $4.2 billion coming from advertising and the rest from payments and other revenues. That’s down $1 billion from the research firm’s estimate from last February, several months before Facebook’s initial public offering in early May. Even so, Facebook’s ad revenues are still forecast to jump 34% this year from a year ago, and rise 29% next year.

The key reason for the change actually does not reflect a key concern of investors: mobile advertising. Although Facebook has been slow to roll out advertising on mobile devices, eMarketer had not factored that into previous forecasts either. Instead, the estimate cut reflects growing concerns about the effectiveness and measurability of Facebook ads.

The revenue estimate cut isn’t entirely a surprise. Facebook reported less-than-expected revenue growth in its first and second quarters this year. And eMarketer’s original forecast was higher than that of many other analysts, whose recent estimates came in at around $5 billion.

Still, the new forecast could add to investor worries that Facebook’s growth is stalling as its advertising sales, especially on mobile devices, come up short. In a market that was down about 1% today, Facebook’s shares fell a penny, to $19.09. That’s about half their IPO level. …

Read the complete post at The New Persuaders.

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