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It's Official, The Farcebook Ad Model Is A Sham!

Reggie Middleton's picture




 

 

Last month I opined on The Truth About Facebook That No Media Outlet Or Analyst Has Bothered To Notice. As its shares marched back up towards its ridiculous IPO price that I warned the entire your previous was basically a marketing/hype scam engineered to confiscate one's hard earned capital, sell side analysts and mainstream media types ignored basic yet blatant cracks in this media darlings armor yet again. For one, we know this high growth company is already experiencing negative growth in active users...

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We also know that Google has essentially caught up to Facebook as a social media platform, reference I Don't Think Facebook Investors Will "Like" This!!! Google Has Already Caught Up In Terms Of Active Users. Despite these pertinent (and quite negative) facts, FB shares have been on the rise, although recently have last some of their froth. Why did the shares pop? Irrational exuberance! The sell side marketing analysis has it that Facebook is perfecting the marketing and mobile business model, and as a result is able to monetize its massive, yet shrinking user base. 

The counter to this argument is basically that it's not true. For one, the shrinking user base is real. The school age youth, once a mainstay of Facebook, is moving on. Simply ask the one's that you know. More importantly, it's ad model is basically a Sham! Any sell side analyst who attempted to value this company based on ad revenues without actually trying out its ad system is not worth postage used to send his bonus check. I tried the ad system out. While the click through rates were actually about 2/3rds that of Google's comparable ad model, the actual sales from the ads were less than abysmal -and this is for a rather interesting product. Even worse, the delivery of the ads proved to be highly intrusive, causing a significant and material amount of negative feedback from the Facebook community. Here are some examples of the feedback received from the so-called Facebook 'ads" that I paid for...

  • "Hey, I don't like this post. Please remove it."
  • "Please remove me from your list"
  • "I am getting unsubscribed advertisements and friend request that say I approved them"

There's actually a lot more than that, this just what was sitting in my inbox before it was deleted. Here's a screenshot of a conversation I had with on of the recipients of the so-called Facebook ads which are essentially paid for placements on somebody's wall...

Facebook ad failureFacebook ad failure

"I am getting... friend request that say I approved them"??? Does that sound like a sustainable business model to you? This is simply Grouponzi 2.0, just on a much larger scale!

 

 

The updated valuation for Facebook (which has actually has an increase in terms of value now that we have more information to deal with) is available to download for all paying subscribers (FB Q4-2012 Analysis & Valuation Note - update with per share valuation). I'm available to discuss this with professional and institutional subscribers via phone or Google+. Click here to subscribe or upgrade.

 

 

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Fri, 03/22/2013 - 05:21 | 3361108 Brixton Guns
Brixton Guns's picture

Goodness gracious I almost forgot.  Something actually relevant tying my last post to this article.  Ahem.

Viddy well my little brothers, viddy well...

http://www.youtube.com/watch?v=6qBI1GY4y5A 

Fri, 03/22/2013 - 05:08 | 3361104 Brixton Guns
Brixton Guns's picture

Speaking of shams, while this is slightly OT id like to use this opportunity to warn all of another sham: that of "a Harvard-educated Doctor" [really just a narcissistic dentist] Leonard G. Horowitz of Hilo, Hawaii.  Some consider him a descendant of the famous "purple gang" Horowitz.  

All I know is this guy is one hundred percent bullshit, fullon edomite, with a slut drug mafia sidekick named Sherri Kane, and they have fullon made death threats and directly caused all sorts of problems for folks far more decorated in this truth business than me; yet still i have been on their radar and have sustained some seriously fucked up nonprovoked attacks including accusations of absurdity not even fit for these columns.  

The latest gyration of their psychotic chicanery is this 528 crap, and if you havent heard of it yet folks, youll get a serious laugh upon seeing their promotion of it, especially after reading the following, written by a close friend and colleague of yours truly:

http://atrueott.wordpress.com/

Thu, 03/21/2013 - 21:53 | 3360260 groundedkiwi
groundedkiwi's picture

I still get like posts from a friend who died 2 yrs ago. The posts all come from a gambling casino.

Fri, 03/22/2013 - 00:38 | 3360762 StychoKiller
StychoKiller's picture

Mebbe yer friend reincarnated as a Croupier(?)

Thu, 03/21/2013 - 21:32 | 3360146 Setarcos
Setarcos's picture

Had a bit of fun with Farcebook's supposed "real name" accounts, which I now have four of, completely devoid of content and which send each other friending requests.

I wonder how many others have multiple accounts falsely inflating membership numbers - quite a few I suppose.

I quit my legit account - with difficulty - over a year ago and have lately been using Google+ to some extent and I find it OK, especially linked to YouTube.

Thu, 03/21/2013 - 21:26 | 3360117 Clowns on Acid
Clowns on Acid's picture

Hey Reggie - Good call on FacePlant. Few use it anymore, and the whole internet ad model is being exposed as a shambolic fraud.

Faking customer clicks via cloud servers

http://www.soft.tahionic.com/download-million-clicks/index.html

There are new ad trading platforms that will expose this howvever. FacePlant will be history then.

 

 

Thu, 03/21/2013 - 21:25 | 3360115 Downtoolong
Downtoolong's picture

Do you want to see these examples of Facebook’s barriers to competitor market entry?

Not now, I’m on Line.  http://www.businessweek.com/news/2013-03-20/facebook-targeted-in-u-dot-s-dot-as-asian-chat-app-line-invades

No problem, I’ll just slip them under the door of your office.

Thu, 03/21/2013 - 21:15 | 3360092 adr
adr's picture

Did you hear about Facefuck's new scam?

If you haven't logged in recently, Facebook will message you to update your status. If you don't update it will keep nagging you until you do.

That is what you get when you have a college kid who has never held a real job in his life running a corporation.

"Bleh, my returning user numbers are down, I'll fuck them by messaging them 100 times a day until they log back in. Ha, that will show them they can't fuck with the Zuck."

Thu, 03/21/2013 - 21:02 | 3360058 hannah
hannah's picture

the problem with middletons analysis is that he thinks the market goes up and down based on 'fundamentals' or 'momentum' or 'irrational exuberance' ..............the market is driven 100% by the fed. why has FB poped...ask the fed.

Thu, 03/21/2013 - 21:27 | 3360124 Tijuana Donkey Show
Tijuana Donkey Show's picture

Ask the CIA. Facebook lets them watch popular sentiment better than anything they have ever dreamed of. 

Thu, 03/21/2013 - 20:03 | 3359902 thisandthat
thisandthat's picture

 

The school age youth, once a mainstay of Facebook, is moving on. Simply ask the one's that you know.

One I know is my (school age) niece - Tumblr's instant gratification/zero aggravation killed it in zero-to-discovery time.

Thu, 03/21/2013 - 20:11 | 3359923 CH1
CH1's picture

The unseen factor is this: The Feds have a surveillance system built into FB (yes, this has been admitted) and they will support it.

Will Benny print money to buy FB bonds? I dunno, but they LOVE their surveillance tools, and they won't want to give up on this one.

Thu, 03/21/2013 - 21:28 | 3360131 Tijuana Donkey Show
Tijuana Donkey Show's picture

You'll use Facebook Connect to register for GOVT benefits. Problem solved. 

Thu, 03/21/2013 - 20:57 | 3360038 thisandthat
thisandthat's picture

They can't support it beyond the market. Once users are gone, it won't be worth it's url registration fee - at best, they'll be left with an outdated, obsolescing db.

Thu, 03/21/2013 - 21:28 | 3360132 palmereldritch
palmereldritch's picture

Unless FB is invoked as the vendor of choice for the new controlled portals of Internet 2 thanks to a little false flag cyber-terrorism and the waiting security of a new expanded data base.

FB...FB<i>

http://rt.com/usa/fbi-recognition-system-ngi-640/

Putting the face in booking

Thu, 03/21/2013 - 19:52 | 3359869 riphowardkatz
riphowardkatz's picture

Reggie what you dont get is that marketing for big business is not about conversions. its about telling your boss that you got a gazillion impressions. Its about his wife saying they saw your ad (retargeting) and they thought it was cool.

You think the conversions on super bowl ads pay for the ads? Its for buying ego.

 

 

Thu, 03/21/2013 - 20:59 | 3360049 thisandthat
thisandthat's picture

So it's not a business platform, it's a vanity mirror.

Thu, 03/21/2013 - 19:18 | 3359796 thisandthat
thisandthat's picture

Hey, Reg - what's your take on the recently much touted bitcoins - any thoughts?

Thu, 03/21/2013 - 21:22 | 3360108 snblitz
snblitz's picture

Bitcoins are an excellent method of transferring value around the globe.

By looking at the current and past value of the currency you can see that it is not very stable, and thus it is not a good store of wealth.

bitcoins do look pretty hanging on tulips.

Thu, 03/21/2013 - 18:51 | 3359692 q99x2
q99x2's picture

It is appalling what FaceBook is doing. Google is also becoming very invasive. It is like screw your client has become the model of the decade. A lot of desperation out there.

Thu, 03/21/2013 - 18:48 | 3359682 WTF2
WTF2's picture

You mean Sheryl Sandberg is full of shit?

Thu, 03/21/2013 - 21:30 | 3360138 Tijuana Donkey Show
Tijuana Donkey Show's picture

Yep, she can lean into a sharp object with her BS. Let's see how she rolls at FB=$0

Thu, 03/21/2013 - 18:41 | 3359655 moneymutt
moneymutt's picture

some government agencies and big corps still like RIM security, doesnt mean they are on a growth curve

Thu, 03/21/2013 - 18:40 | 3359649 exgop
exgop's picture

Reggie
Facebook Jew company,,,what did you expect ??

Thu, 03/21/2013 - 18:31 | 3359593 EscapingProgress
EscapingProgress's picture

September 2013 is when Suckerberg said he might start selling his FB swag. We'll see what happens between now and then.

Thu, 03/21/2013 - 17:40 | 3359415 F. Bastiat
F. Bastiat's picture

Facebook's little mroe than the 2nd coming of "theGlobe.com".

Thu, 03/21/2013 - 21:16 | 3360095 adr
adr's picture

It is actually more like Geocities.

Thu, 03/21/2013 - 16:44 | 3359166 Zer0head
Zer0head's picture

MySpace

Thu, 03/21/2013 - 17:32 | 3359372 algol_dog
algol_dog's picture

Part II

Thu, 03/21/2013 - 15:26 | 3358743 bank guy in Brussels
bank guy in Brussels's picture

Big story Reggie Middleton seems to be missing (or not commenting upon out of embarrassment) ... while going back repetitively to the just about dead topic of Facebook fraud

The story is the fairly runaway success of Blackberry's new phones ... order of a MILLION new phones from one customer alone

Reggie has pooh-poohed those new phones, in favour of his pet Android phones designed by Reggie's murdering criminal friends at Google Inc.

Reggie claimed in a dismissive 'review' the new Blackberry phones were nothing special that he could see

But Karl Denninger, a computer tech geek guy as well as financial pundit, has been covering the runaway Blackberry success ... and has made some money on his good Blackberry share price call

Denninger detailing why the phones are much better, especially for serious business customers ... like Reggie would claim to be

Blackberry much more secure, better power management and functionality, working with hundreds of thousands of apps ... in fact many if not most Android apps will convert to run on Blackberry within seconds

This is a big story for the phone world ... and cheerful news for everyone who would like to see the CIA's Google Inc. go down to hell where it deserves

Karl Denninger's most recent article on this here:

http://market-ticker.org/akcs-www?singlepost=3164786

Thu, 03/21/2013 - 21:31 | 3360144 Tijuana Donkey Show
Tijuana Donkey Show's picture

Both FB and Google have HUGE issues with click-fraud from botnets, and no one wants to admit it. 

Thu, 03/21/2013 - 16:56 | 3359174 Zer0head
Zer0head's picture

So you are saying that the folks who run Blackberry will not sell/give your info to the highest bidder or government agency that requests it?

 

dream on

India, RIM reach arrangement on giving security agencies peek into messages

http://tribune.com.pk/story/339892/india-rim-reach-arrangement-on-giving...

 

RIM to share some BlackBerry codes with Saudis

http://in.reuters.com/article/2010/08/11/idINIndia-50755320100811

 

RIM Helps Russia, China Monitor BlackBerry Users' E-mails

http://www.forbes.com/sites/firewall/2010/08/02/rim-helps-russia-china-m...

Thu, 03/21/2013 - 14:42 | 3358404 chrispycrunch
chrispycrunch's picture

Facebook's gonna force videos to autoplay - play ads. that'd work with its already shrinking user base

Thu, 03/21/2013 - 18:12 | 3359543 Matt
Matt's picture

speaking of autoplay, if you want a migraine go read an article on huffingtonpost.com odds are, it will autoplay 3 videos all embedded in the article, and none of them will pause when you tell them to, and they do not have individual volume or mute options.

Thu, 03/21/2013 - 19:26 | 3359778 Palladin
Palladin's picture

If you are using FireFox, try adding AdBlock Plus, and Ghostery. Tell Ghostery to block everything, and enjoy ad-free browsing.

Try to get version 2.91 if you can. Ghostery is fighting some bugs in later versions, although they might have got them fixed by now.

Ghostery by default displays the tracking bugs that are on each web page. You will be astonished how many there are, especially on the MSM sites like CNBC, Bloomberg, and I'm guessing Huffpost as well.

Some videos won't play if Ghostery is enabled. It's easy to pause blocking, watch the video, and re-enable it.

FWIW, there are 7 on this page right now being blocked.

Fri, 03/22/2013 - 02:23 | 3360932 John_Coltrane
John_Coltrane's picture

Yeah, I'm blocking 9 of 9 trackers on this page right now.    Everyone should use Ghostery and AdBlock.

Thu, 03/21/2013 - 20:54 | 3360028 palmereldritch
palmereldritch's picture

And if you have an Android phone download it directly from Mozilla as Google Play will not update changes in latest version...lol

http://adblockplus.org/blog/adblock-plus-for-android-removed-from-google...

Thu, 03/21/2013 - 18:53 | 3359703 NotApplicable
NotApplicable's picture

Noscript is your friend.

Thu, 03/21/2013 - 14:07 | 3358212 williambanzai7
williambanzai7's picture

Reggie, did you see Cramer 's bull race between Facebook and Goldman Sachs?

Do NOT follow this link or you will be banned from the site!