Warm Southern Breeze

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Posts Tagged ‘Nordstrom’

Big Name Retailers abandon FaceBook during IPO period

Posted by Warm Southern Breeze on Friday, February 17, 2012

News of FaceBook‘s February 1, 2012 filing for a $5Billion IPO (Initial Public Offering) status has Wall Street investors salivating, if not outright champing at the bit for an actionable piece of of that pie. With an estimated net worth of $17.5Billion, CEO Mark Zuckerberg, whom at age 28 is one of – if not the – world’s youngest billionaires, could at least double his personal net worth.

With an estimated 845 million active users, and offices in 15 nations, among online tech giants such as Google, Twitter, and the soon-to-be-defunct MySpace, FaceBook continues to dominate the  SoMe (Social Media) market.

As many may already know, FaceBook neither provides a marketable product or service, and their solitary claim to market value lies in harvesting demographic data from those who establish free FaceBook accounts – which also continues to be a corporate sore spot because of privacy rights concerns. While advertising revenue for the company accounts for their majority income, their “click-though” rate – the percentage of which site visitors click on an advertisement – remains the lowest in the online advertising industry, at 0.04% (400/1,000,000). Standing in stark contrast is Google’s 8% click-through rate, while MySpace’s click-through rate of 0.1% still surpasses that of rival FaceBook.

Video advertising, however, remains a FaceBook strong suit. A study conducted in 2010 found that more than 40% of those who viewed the advertising videos watched the entire video, while the industry average was 25%.

Pundits suggest that the technologically savvy younger demographic uses ad-blocking software, and ignores advertising, whereas an older, more mature demographic may not be aware of such add-on features.

Now, amidst the opportunity and risk, traditional retailers and eTailers have slowly begun to abandon their FaceBook presence.

This is not good news for potential investors.

Retailers Shut Facebook Storefonts Amid Apathy

By Ashley Lutz – Feb 16, 2012 11:00 PM CT

A shop in Tahrir Square is spray painted with the word Facebook in Cairo, Egypt. Photographer: Peter Macdiarmid/Getty Images

Last April, Gamestop Corp. (GME) opened a store on Facebook to generate sales among the 3.5 million-plus customers who’d declared themselves “fans” of the video game retailer. Six months later, the store was quietly shuttered.

Gamestop has company. Over the past year, Gap Inc., J.C. Penney (JCP) Co. and Nordstrom (JWN) Inc. have all Read the rest of this entry »

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