Facebook Inc (NASDAQ:FB) Launched its Facebook Offers program a year ago. It was touted as a free service, which would allow businesses to send promotions directly to users’ news feeds. The program, which is a competitor to Groupon Inc (NASDAQ:GRPN) and other online retailers, allows Facebook users who are followers of a certain company, to obtain discounts for that company’s products and services.
The service seems to be very successful in attracting businesses to advertise their products on Facebook Inc (NASDAQ:FB). Now, it seems that the company’s executives have decided it’s time to turn this asset into a revenue stream. Reuters reports today that Facebook will begin charging companies for the targeted advertising, and their plans to do so will be very effective.
According to the report, companies who wish to continue using Facebook offers to promote their products, will be required to spend at a minimum, $5 on related advertising. The costs of the ads will be based upon the size of the company’s Facebook page. It will be interesting to see if Facebook can really make this into a profitable revenue stream.
As we have reported several times, here on ValueWalk, Facebook Inc (NASDAQ:FB) has been facing severe money troubles ever since its ill fated IPO in the spring of this year. While it was possibly one of the most anticipated IPOs in the history of the stock market, technical glitches and poor management of those errors by the NASDAQ stock exchange, caused millions of dollars in losses to investors. This no doubt left a bad taste in the mouths of many investors, and the stock price plummeted following the IPO.
Another factor, which we have also covered here on ValueWalk, is the fact that Facebook Inc (NASDAQ:FB) has waited far too long to capitalize on the mobile side of their network. Mobile users outnumber PC users, and Facebook only recently began to work on making the mobile part of its business profitable. However, CEO Mark Zuckerberg did seem to hold some sway over investors, as he spoke to TechCrunch earlier this month and expounded on Facebook’s plans to begin a new push to boost revenue. Zuckerberg has been held in some disregard by many investors, due to the way he dresses for major events, like the IPO. Some find his casual attire, which included a hoodie and tennis shoes, to be offensive in the presence of investors.
It will be very interesting to see if Facebook Inc (NASDAQ:FB) does indeed make a comeback from its bumpy downhill ride on Wall Street. The stock has dipped below $18 per share, after being offered at an initial price of $38 per share, and has only recently started a long uphill climb back towards its initial price. At the time of this writing, Facebook is trading at $22.76 per share.