Facebook slides as underwriters give mixed ratings Associated Press Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Updated 05:32 p.m., Wednesday, June 27, 2012 Facebook derives the bulk of its revenue from advertising on its website, and while it has been testing mobile ad products, it warned before its IPO that its mobile users are growing at a faster rate than the revenue that it's making from them. "While virtual, the social interaction that users engage in via updates, status changes, likes, shares, and playlists, among others, builds long-term relationships and audiences," Schackart wrote. Facebook could, in fact, become the largest (Internet) platform one day in terms of revenue and profits, given the size and engagement of its user base and its high-margin business model. Facebook, like several other technology and media companies, has two classes of shares in order to keep voting control in the hands of its executives and early employees. Analyst Spencer Wang said that while Facebook is in a good position to capitalize on the growth of social media, its stock price already reflects a "fair amount" of this growth, limiting his enthusiasm.

 

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