A hiccup for Facebook

The highest profile IPOs tend to have hiccups, if only because the scrutiny is so intense.

Recall the accounting snafu that bedeviled the Groupon IPO. Recall also the article in Playboy that caused so much regulatory consternation when Google went public.

Facebook has avoided such mini-fiascos, but the debate about its future has been unusually intense, and that makes the move by GM significant to say the least, as Facebook heads toward a Friday stock market debut. The big auto maker has announced it will cease paid advertising on the social network, saying that the return on investment just isn't there. This is a blow no doubt, as GM's move might prompt other big advertisers to rethink their approaches. GM ranks as a top-three advertiser on the internet, so its influence cannot be discounted.

It may be that future investors have factored in this sort of potential downside already, as the issue not new. The social network "leads the Web in display advertising revenue, according to a February report from the online advertising analysis firm eMarketer, but it is on a pace to lose its lead to Google by the end of the year," notes the Washington Post.

In any case, the timing of the announcement raised brows. This isn't going to derail the deal but it does add some color to the debate about how the stock will fare in the aftermarket. It just might be fairly valued on offer.

For more:
- here's a Washington Post article

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