On the eve of Facebook’s IPO, many will be watching closely to see what happens with the stock. In the coming days, we’ll see the price fluctuate and eventually, settle in to where it will remain more stable than it will be in the first days of trading. With only a lucky few able to get in on the IPO, there is hope that Facebook will be as hot a stock as Google was early on with a steady increase in the stock price over time. To that end, once all the hoopla surrounding the IPO dies down, talk will turn more definitively to Facebook’s revenue model. Facebook’s ability to generate revenue will be necessary in order to move the needle on the stock price.
Google had an attractive model when it when it first went public. In fact, it was a cash cow out of the gate. Comparatively, Facebook’s revenue prospects right before going public are good but not as clear. As an online marketer who has bought advertising from both Google and Facebook since they both began selling it, I can affirmatively say that what Google offers is phenomenal and what Facebook offers is ho-hum, so-so, really not that great. Google continues to bring in new buyers at efficiency rates as good as and often better than that of the top tiers of the other direct response channels. Facebook, on the other hand, has not impressed many marketers on the advertising side from a performance standpoint.
