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Facebook Has Smartphone Revenue Dilemma

05/24/2012

As the use of social media continues to grow and become more prevalent, it becomes increasingly important to look at social media usage statistics to help predict future trends. Businesses of all types and sizes are trying their hand at social media…but one question is still nagging most of us.

How do I make money with social media?

Facebook users are increasingly accessing the online social network via their mobile devices, a trend the company has not been able to capitalize on. In March, the average Facebook mobile user engaged with the social network for more than 7 hours, according to comScore.

Specifically the average time spent accessing Facebook via smartphone in the United States was 441 minutes in March, compared with 391 minutes via computer, also according to comScore, underscoring the increasingly high-profile role of mobile in social networking.

That’s a lot of head-down time to which Facebook has to respond.

In filing documents for its initial public offering, Facebook highlighted the importance of mobile while noting it does not generate meaningful revenue from mobile users.

“If users increasingly access mobile products as a substitute for access through personal computers and if we are unable to successfully implement monetization strategies for our mobile users,” the company writes in its filing documents, “our financial performance and ability to grow revenue would be negatively affected.”

Facebook users have not responded to advertising – especially on smartphones. In part because smartphones have really small screens and users are grabbing small sips of information while multitasking with their smartphone. This appears to hold true for Twitter as well. LinkedIn, due in large part by its “business” use, is the most likely to be able to leverage advertising as a revenue generator.

If the wheels fall completely off the Facebook bus watch for a tsunami of speculation about the long-term  of social media as a marketing channel. This could get ugly.

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