Just call it 'Fakebook'?
Facebook estimates that it has 83 million fake accounts, which is higher than what it had pegged in the past.
By Louis Bedigian, Benzinga Staff WriterThe good news is that Facebook's own estimates, which come from the company's 10-Q, are relatively positive. The company believes that it has 872 million real users (via Mashable). This is a very impressive number.
However, it also means that Facebook is overwhelmed with 83 million fake accounts, or 8.7% of total users.
Facebook defines these fake accounts in a handful of ways:
- Duplicate Accounts, defined as "an account that a user maintains in addition to his or her principal account." These make up 4.8% of total users.
- User-Misclassified Accounts, which are produced when a user creates a personal profile for a business, organization, or non-human entity (such as a pet), make up 2.4% of total users.
- Undesirable Accounts, which are often used for spamming, make up 1.5% of total users.
For a company that claims to have 955 million members, the number of fake accounts is particularly depressing. The number is also much higher than that of fake users that Facebook estimated it had during the last quarter (40 million to 50 million).
Facebook has been struggling over the past two weeks. Since July 26, company shares have lost more than 45% of their value, dropping from $29.34 at market close on July 25 to $20.88 on August 1. Facebook fell another 4% Thursday to close at $20.04.
Some investors and analysts worry that the company does not have an effective business model for monetizing its many users. Others wonder if the company is paying too much for acquisitions.
In June, comScore (SCOR) attempted to prove that Facebook offered an efficient ad platform by releasing the results of a widespread study. At the same time, Ford (F) and Coca-Cola (KO) pledged their support for the social network.
One software startup raised questions about phony Facebook accounts this week when it found that as many as 80% of the clicks on its ads appeared to be coming from bots.
Facebook is such a sham it's amazing that it wasn't apparent to more people way before the IPO. Subscribers have been brainlessly duped into providing a wealth of personal information to be packaged and sold to advertisers, marketers, the government, etc. Meanwhile, their blind trust and opt-in to the EULA is constantly being barraged by invasive changes to the privacy policies and creepy changes to the user interface.
A whole generation is growing up with no comprehension of the idea of personal privacy or boundaries. The leading edge of this generation is already becoming aware of the downside of putting their lives on public display, including unflattering youthful...ermmm...indiscretions, that have cost them jobs during interview screening processes---years later.
Consider:
- Facebook has no tangible product ("vaporware")
- A significant shortcoming is the limited shelf life of the personal information it has mined
- It is fad-based, subject to user fatigue, and has no significant barriers to entry for challengers
- The model has not proven out value-added for advertisers
- It is weakened by its lack of a cohesive growth strategy and functional mobile platform
The primary demographic (teenagers and young adults) have already been saying for months, "Facebook is over."
Stock value $10-$15/share before year end.
MORE ON MSN MONEY
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
STOCK SCOUTER
StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.
127 | 269 | 463 | 588 | 658 | 616 | 643 | 431 | 263 | 138 |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
LATEST POSTS
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
FIDELITY VIEWPOINTS
- How to sell covered calls - Fidelity Investments
- Savvy year-end tax moves to consider now - Fidelity Investments
- Seven ways to prepare for tax changes
- Five reasons an annual review is crucial - Fidelity Investments
- Take a look at mid caps now - Fidelity Investments
- State of the sector: Health care - Fidelity Investments
VIDEO ON MSN MONEY
ABOUT
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.