At the Business Insider’s Mobile Advertising Conference today, Brian Colbert, Vice President of Advertising Sales for Pandora (NYSE:P), gave an insightful presentation — but one that could be bad news for Facebook (NASDAQ:FB) shareholders.
First of all, Colbert had this breakdown on the mobile moneymakers:
| Company | Ticker | Revenue |
| GOOG | $750M | |
| Pandora | P | $100M |
| Apple | AAPL | $92.4M |
| Millenial Media | MM | $90.9M |
| Other | n/a | $517.4M |
The fact that Facebook doesn’t appear on the chart (except as a portion of “other”) should be really scary considering the company has 488 million monthly active mobile users.
The rapid shift to mobile is resulting in a deceleration in growth for Facebook’s advertising revenues. True, the company finally is making efforts to ramp its mobile advertising — through efforts such as offering “sponsored story” deals for its mobile app. However, this could take a while to get traction — or it might not take hold at all.
Colbert says advertisers still are experimenting with mobile platforms, which means the money budgeted for such platforms is relatively strong compared to other media. Companies still are trying to figure out the right formats and strategies, and performance-tracking technologies still are in their early phases.
Pandora seems to be a bright spot. It has an ideal platform — it has mostly audio ads, which anyone who ever listened to traditional radio is accustomed to. Better yet, Pandora’s ads take up a mere fraction of the time traditional radio ad blocks clog.
But Facebook does not have this advantage. Rather, it must find creative ways to embed text ads without being intrusive — a highly limiting boundary that carries the risk of alienating users.
So long as users shift to mobile — and there seems to be no let-up of this trend — the going will be tough for Facebook. And making up for the revenue shortfall could easily take a year or more, which certainly makes Facebook’s stock vulnerable to more declines.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
