Facebook’s results suggest it is short of new users and goodwill
by Guardian Staff from on (#3VSA9)
As more of the world logs on, the company is nearing saturation: so now it is spending on rebuilding its reputation
What's bad for Facebook's market cap might be good for society. That, at least, is what the company would like investors to take away from its disastrous second-quarter results, which triggered a fall in its stock-market valuation of almost $120bn (92bn), the largest single loss of value in Wall Street history.
At its core, the collapse is due to three negative trends: a stagnant user base, shrinking revenues and growing costs. The first, Facebook argues, has been visible for years; the second is a blip as advertisers get used to new formats; and the third is a reflection of the significant sums the company is spending to fix the problems that have plagued it in the press over the past year.
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