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More PR Woes for Facebook Follow IPO
By: Gerard E. Mayers
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In my blog last week on Facebook’s then-upcoming IPO and the possibility of it becoming a PR Bomb for Zuckerberg and his cronies, I mentioned a Wall Street Journal article that said that some of the social media giant’s investors were selling their shares and that auto giant GM decided to pull its ads from FB, citing lack of revenue coming from its use of the site to advertise its products.

Now come allegations that revised financial forecasts for FB following the IPO were shared only with certain investors and not with others, sparking news of possible investigations by both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FIRA). The chairs of both organizations cited concerns raised “surrounding Facebook's initial public offering in an effort to ensure confidence in public markets” according to a WSJ story earlier this week. The same WSJ story also noted that “Morgan Stanley and Goldman Sachs Group Inc. updated their financial projections for the social network after the company added warnings to its IPO prospectus about how its user base is increasing more rapidly than the number of ads it delivers, according to the people close to the deal. That trend was blamed in part on increased use of Facebook on mobile devices, where it traditionally hasn't shown ads to viewers.” Topping that off, Nasdaq admitted bungling Facebook's IPO, acknowledging that tech problems affected trading in millions of shares.

Contribute to this growing list was the recent buzz at a digital media summit held the other week about GM’s snubbing of FB by pulling its ads from the site. Everyone at that summit was talking about the move by the auto giant once considered “too big to fail” and what other companies might follow suit. Comparisons were made to the earlier and hugely popular social site MySpace, which went basically extinct following Facebook’s launch and rise to popularity.

FB’s hopes of stunning revenue gains and good PR from its IPO seem to be drowned in a tide of woes. What bad news might be coming next for the social media giant?

How FB is going to successfully counter all the recent negative publicity should be illuminating at the very least. It might even (eventually) serve as a primer on what to do and not to do when your company is considering an IPO and how to use your PR agency of record or internal PR team in both crisis communications and putting best foot forward.

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About the Author
Gerard E. "Gerry" Mayers writes about PR and other relevant topics for PR professionals. A former PR manager for Sensor Products, Inc. (currently based in Madison, NJ), he lives in Milford, NJ.
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