GM cuts out Facebook
GM says ads have little impact.
General Motors (GM) confirmed a report by the Wall Street Journal on Tuesday, saying they will stop advertising on Facebook. The timing of the announcement comes just as the social networking giant plans to go public with its stock.
General Motors has announced they will no longer advertise on Facebook.
"In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers," the statement read.
According to the Journal article, GM has paid about $10 million to Facebook for advertising services and another $30 million to ad agencies for Facebook content creation and management.
The announcement is significant, and not only for its timing. GM is the third largest advertiser in the nation, just behind Proctor & Gamble and AT&T.
Meanwhile, Facebook will start public trading on Friday. The stock is expected to be a hot commodity, however some experienced investors warn it is already overvalued and on a bubble. At least one editorial considers the Facebook IPO to be a potential "tulipmania," referring to the infamous bubble in tulip prices that crashed the Dutch economy in the 17th century.
It is unlikely that Facebook, despite its high initial offering, has the potential to do any significant harm to the economy, although investors at some point are bound to lose. Following a rise in the company's IPO prices, the company is now valued over $100 billion.
© 2012, Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: General Motors, GM, Facebook, IPO, stock, tulipmaina, economy, bubble
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