It seems that bad news won’t stop piling up for Facebook, after the hype and burn of its IPO.
A new report from eMarketer found that retailers Nordstrom and JCPenney are giving up their efforts to sell products through Facebook’s F-commerce platform, as more than 50% of the social network’s users say privacy and security concerns prevent them from buying products and services through Facebook.
The finding will further stir investors’ anxieties in the wake of the social network’s IPO. Facebook (FB) stock has lost a staggering 24% in value, since its initial offering of about $38 per share, and the new F-commerce developments won’t be reassuring to the already nervous investors.
JCPenney and Nordstrom’s decision to drop Facebook from their online marketing strategies mirrors General Motors’ recent exit from Facebook Ads, the social network’s online advertising platform, in response to concerns that social ads “have little impact” on consumers’ purchasing decisions.
The F-commerce episode is just another concern for Facebook investors who are already nervous about the social network’s ability to monetize the transition of its monthly active users (MAUs) to the growing mobile market, as historically the company hasn’t shown ads to users accessing Facebook through mobile apps from their smartphones or tablets.
And the landscape just gets grimmer. Investors have also expressed concerns about Facebook’s user growth, which despite its steady pace upwards — as of Q1 2012 Facebook had 901 MAUs, an increase of 33% compared to the previous year — is becoming increasingly more difficult and expensive to keep users engaged. Competition from global and local social networks, as well the low cost of switching from Facebook to any other social service, may cause an exodus as soon as a more attractive option comes along.