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Should We Believe Facebook’s Earnings?

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyToday is a big day for FB:NASDAQ.

The first earnings release after a pretty crappy IPO.

Needless to say, earnings and guidance must destroy expectations.

This is important for everyone who has a stake in the company – from those who had blind faith in the IPO and bought whatever meager shares they could, to the early investor billionaires and millionaires who were counting on a lot more than they’ve received thus far (greed’s a real pisser), to all the Facebook employees that have lost a bit of their swagger (and future riches) over the last couple of months.

In fact, Silicon Valley as a whole has lost its swagger a bit because of this IPO flop.

A blow-out earnings report would allow all those who were doubted and shunned to say “nah nah nah nah naaaah – told you so – we rock you suck, etc.”

Which makes me wonder, if, indeed, this is a blow-out earnings report despite what many analysts are predicting (consensus: not a blow-out), should the numbers be believed?

Is there a temptation by management and the number crunchers to goose things a bit for this very important first earnings report? Juggle some things. Move stuff around – make it up later. I’m sure they feel they’re smart enough to get around that little “random regulatory audit thing.”

They’ve got millions of made-up users – why not millions of made-up dollars?

There must be that temptation, right? I mean, how much could the SEC fine be in the scheme of things?

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyI’m sure the immediate reaction to such a wild, speculative (and probably fictional) premise is – “I’m shocked!  How dare you presume that Facebook – with its long history of supreme ethics and outstanding morals would even dream of such a thing?”

Maybe it’s just me.

But if we hear on Thursday that there are now over 1 billion users – I’m just not going to believe it (especially when you take out the 200-300 million users that are either animals, aliases or fictional characters).

If they say that people are spending more time than ever on Facebook – I’m just not going to believe it.

If we hear on Thursday that advertising on Facebook has never been better and will continue to grow into 2013 – I’m just not going to believe it.

It is Mark Zuckerberg and Sheryl Sandberg’s job on Thursday is to convince us that things are awesome and getting ‘awesomer’ every day.  And when they say that, I am not going to believe it.

But, truth be told, I am not the most bullish person when it comes to Facebook.

After all, I did write “Facebook And The Disappearing Valuation (A Fairy Tale),” and “Facebook Is Worthless,” and “Facebook Must Be Stopped,” and “All The Facebook’s Men,” and “Advertise On Facebook And Reach More People Than 10 Super Bowls,” and “Facebook To Reach 7.3 Billion Users By 2015,” and “Y Combinator Is a Stupid Idea” (I just threw in that last one for fun).

But you do have to wonder – it is soooooo important NOT to disappoint and pressure is coming from everywhere to make sure that they don’t.

Accel Partners, Ben Silverman, Bob Iger, Chris Hughes, David Kirkpatrick, Dustin Moskovitz, Eduardo Saverin, Gerald Levin, Greylock Partners, HBO, Jeff Bewkes, Jeff Zucker, Jill Kennedy, Joanna Shields, Jon Miller, Khan Manka, Li Ka-shing, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, MySpace, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Peter Thiel, Rupert Murdoch, Sheryl Sandberg, Sumner Redstone, Toy Story 3Jill Kennedy – OnMedea

 

Permanent link to this article: http://mankabros.com/blogs/onmedea/2012/07/24/should-we-believe-facebooks-earnings/

14 comments

  1. Sinbad says:

    All I know is I have never clicked on an ad and I have really cut down on my time there. It’s boring now. Nothing there to keep me.

  2. Ken C says:

    Agreed Jill. Greedy investors thought Facebook would be the goose that laid golden eggs. The reality is that Facebook was never designed as a huge profit-maker and forcing it down that route would alienate many users. Personally I think it’s time that people invested in real things again.

  3. Fast Eddie says:

    Apple’s miss might help them out actually. They can miss and not be one of the only ones.

  4. Liars says:

    Of course you don’t believe them. You can’t believe any company when they report earnings these days. It’s all bullshit and not just Facebook doing it. I get the point though.

  5. Lettuce Prey says:

    FB will not exist within 5 years.

  6. Smith says:

    Public companies are subject to regular audits where they have to support their claims.

    1. Winchmore says:

      All earning are cooked …well know game in the city :)

  7. Bretaxis says:

    In this market does it matter if they are believable or not?

  8. Nexus789 says:

    Never used it. Has a poor business model. Social media is voyeuristic.

    What does it mean if a corporation has ‘friends’ or ‘followers’? Can you ‘friend’ a corporation? Very simplistic way of creating a ‘relationship’.

    A lot of these measures are algorithmically unsound (friends can be ‘created’). The BBC recently created an imaginary company that quickly acquired thousands of ‘friends’. This is the new form of spam. Are they real people and if they were real would they have not checked to see if the product and company were actually real?

  9. mrbluiss says:

    I love your user base statement. I’ve been looking for a way to make authors of
    articles and using that 900 million user number to include “Alleged” before it if
    they are going to make any reference that can’t be proven.

  10. Patty O'Furniture says:

    Should we believe Facebook’s earnings? Probably not. It is not unheard of to exaggerate earnings and then quietly go back and revise them later. It wouldnt be the first time, and it certainly wouldnt be the last.

  11. Sergio says:

    You imply Facebook fakes the clicks on ads? Did you ever run an ad campaign on
    Facebook? If so you should know these are very real people ending up on your site or
    whatever it is you’re advertising for…

  12. Commercial sports are a waste says:

    Jill. I rarely ever post comments anywhere. And never where I have to login with my fb/google/twitter/something-else id. Almost all sites now are in a race to lick facebook’s butt and be “in” the “social networking” wave and logging in made a requirement, that your “little blog” is an oasis to a parched traveler. God speed you Jill. I am a techie scientist, and I knew from the beginning the nature of facebook (even after discounting the unscrupulous nature of the founder). And I dread it, detest what it has done to the precious notion of privacy in our culture. And peace and sensibility. It is the very face of evil to me, and now wants to be the gateway to the internet, and wants to change laws. I am sick of facebook. I want it to die. Well guess what, their stock is at 19 today. Am I delighted. Thankfully I am far away from retirement, even if my 401k fund manager was dumb enough to invest in it, I want it to die. Keep your little blog active, it may be the one sane voice that is strong enough to wake people up.

  13. schneider volt says:

    Your entire system is based on fraud, audit fraud, false economy, internal trading, Stanford Biz school need not be rated when the situation is like this, they graduate from it to do false business

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