What's not to like about Facebook?
At Facebook's California headquarters they must be wondering what went wrong.
In a little more than two months the social networking site has gone from the darling of the media and Silicon Valley to the whipping boy of Wall Street.
The hype that surrounded its stock market debut in May when its valuation hit $US104 billion has given way to disbelief and derision.
Has the bubble burst or is it simply a coming of age for the business which, until recently, was the plaything of founder Mark Zuckerberg and a coterie of savvy investors.
''The early investors could see the long-term plan for something like Facebook,'' says analyst David Cowling of Social Media News.
''Now it's the public and they want to see their shares grow, they want to make a quick buck. And they aren't getting it and now they are asking why not.''
Shares are almost half the $US38 they were on the first day of trading and while Facebook brings in new ways of advertising and explores how to get people to stay on the site longer, the clock is ticking as the patience of investors wears thin.
Yet as the share price heads south, it's business as usual for the rest of us. Every day Facebook's global user base inches closer to the 1 billion mark.
An extra 50 million people joined in the past three months, pushing the worldwide user base to 955 million.
''Users couldn't give a stuff," says social media expert Tiphereth Gloria of the advertising agency VML. "Everyone [in finance] is getting their knickers in a knot but people are using it just as much as they were before.''
Growth comes at a cost, however. Investor demand for more ad revenue presents Zuckerberg with a dilemma. His mission, to preserve Facebook's ''user experience'', is an uncompromising one.
''We don't build services to make money; we make money to build better services,'' he is quoted as saying.
The constant criticism is taking the shine off the Facebook brand. "There's clearly some brand damage and if there's not much sign of a change in the longer term then it could get worse," says California-based Brian Blau, research director at analysts Gartner. "But I don't think we're there yet."
To get more revenue Facebook is pushing sponsored stories or posts - ads that appear in a user's new feed whenever a friend indicates they like an advertiser - as a solution to advertisers.
It is also slowly overcoming the problem of how to make money from ads served up on mobile phones, constrained as it is by the limited real estate of the device screen.
But, says Blau, advertising is not the only solution. "The real question is how they are going to keep people interested in their site. How are they going to keep people engaged," he says. And that is unlikely to be by ads.
As Facebook has changed the way we communicate, Blau believes it will also transform other aspects of our lives such as how we shop, work and play.
He points to Google and Amazon, both of which have branched out beyond their core offering of search and books into other services.
Gaming apps, for example, where people can buy credits for games such as FarmVille, have proved profitable for Facebook, although it is an area that is flat lining.
"What we are seeing is an experiment in real time and they [Facebook] are experimenting with their [investors'] money," Blau says.
Sydney Morning Herald