Can You Make Money by Buying From Facebook's IPO? - huffingtonpost.co.uk
The answer is simple. Only if they can turn their organically grown database into a revenue stream channel the $100 billion valuation makes sense and one can make money out of it. If you think this is a good answer, think again?
This answer fails to understand the influential power social connections can have long-term. By thinking you can't make money since users aren't clicking on ads you are missing the whole point. In the online world we are all used to measuring everything from click through rates to sales in real time, however with social sites like Facebook one must have a holistic approach in order to reap the benefits which lie underneath the surface. It's a bit like saying we shouldn't invest in customer service because it doesn't produce returns; while you may not be able to track the return on investment on your customer service initiatives like you can with your marketing campaigns, that's not to say that investing in customer service won't yield positive returns.
A new report by internet marketing research company Comscore suggests that social media marketing can show a positive return on investment by directly influencing sales, but it has to be measured in a different way to conventional online marketing since it's not ads that are driving sales, building brands and creating customer loyalty. It's the very act of being social and engaging with your customers. That means understanding the link between Facebook's various ad units with what Comscore calls free earned media, which is essentially the posts and other actions by brand and consumers on the social network.
The Comscore report cited examples of how advertising on Facebook could be traced to sales increases. For example, by tracking consumers who were Starbucks fans on Facebook against a control group of shoppers who weren't exposed to those messages, Comscore found that over a four-week period, 2.12% of the brand's fans and their friends made a purchase at the coffee shop. That's 0.58 percentage points higher than the 1.54% for the control group. That suggests that fans and their friends made 37.7% more purchases than those not exposed to the brand's earned media.
So all in all, can we buy Facebook shares at the current price and still make money. While the answer seems positive, you may want to wait as the current scepticism around Facebook's potential to deliver a return on investment may result in share prices dropping short-term, only to start seeing an upward movement medium to long term but we will most probably have to wait several years to witness this change. I guess the question is, if social media advertising is still in its infancy, where is the social media stock market? You can't expect for investors to understand now what most marketers still don't.
Social media will create a revolution in how we behave ourselves and eventually will start the next bull market, but not for at least three to five years. Social media gives the ability for everybody to be in instant communication with everyone else, and that's very powerful. We must not forget that Facebook is the pioneer of the social media generation, and remains as the most powerful social media network in the planet.
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FOREX-Rising Spanish and Italian yields pulls euro lower - Reuters
* Euro cuts gains as Spanish borrowing costs rise
* Italy sells three-year debt at 6-mth high of 5.3 pct
* Investors wary ahead of Greek election on Sunday
By Anirban Nag
LONDON, June 14 (Reuters) - The euro pared gains against the dollar on Thursday as Spanish and Italian bond yields surged, highlighting the risk of euro zone contagion ahead of Sunday's elections in Greece that could lead to the country being pushed out of the common currency.
The euro's outlook may stay bearish after benchmark 10-year Spanish government bond yields hitting 7 percent on Thursday - a level where fellow euro zone members such as Greece and Ireland had to seek international bailouts as it is seen as too expensive in the long term.
The aid deal put together for Spanish banks at the weekend has signally failed to calm the markets, with Italian three-year borrowing costs spiking to 5.30 percent at an auction on Thursday.
The common currency fell to a session low $1.2542 on trading platform EBS, turning lower on the day and off the day's high of $1.25894. It was last trading at $1.2565 with large option expiries cited at $1.2500 which could curtail losses for the time being.
"Spanish yields are creeping up, which clearly indicates that the bank bailout deal will not change anything and they are dragging Italian yields higher," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners.
"For the euro/dollar, all this means it is on a slippery slope down."
Earlier, the common currency took Moody's downgrade of Spanish government debt to one notch above junk status in its stride.
Many analysts said the euro was likely to trade between $1.24 and $1.27 ahead of Sunday's Greek vote, with investors either reluctant to initiate fresh bearish bets or squaring positions given uncertainty over the election outcome.
Speculators have added to very large bearish bets against the euro in the past few weeks, leaving scope to the euro to stage a short-covering rally if parties supporting austerity and reforms in Greece win at the weekend.
Right now, it is too close to call and a victory for the far-left SYRIZA, which opposes the austerity measures on which Greece's bailout deals are based, would intensify fears of a potential euro zone break-up, and likely push the currency towards recent two-year lows around $1.2280.
A sharp rise in yields on German Bunds, viewed as the euro zone's safest asset, has also raised concerns that the cost of the debt crisis is growing for Germany, the bloc's paymaster. A further rise in German yields would weigh further on the euro, traders said.
SNB REITERATES FRANC CAP
The Swiss franc rose against the euro after the SNB said it was prepared to buy unlimited amounts to defend the 1.20 level. The euro fell to 1.2008 francs on trading platform EBS, from around 1.20196 before the announcement.
Traders said the SNB has been buying lots of euros in recent weeks, stepping up its defence of the cap ahead of the Greek election, which could fuel demand for the safe-haven franc. SNB President Thomas Jordan hinted that capital controls could be introduced if the situation in the euro zone deteriorates and puts more upward pressure on the franc.
"Clearly the SNB is trying to downplay the franc's attractiveness and buy more time. We expect further pressure on the euro/Swiss franc 'floor' in the coming days, especially considering the Greek elections," said Peter Rosenstreich, chief FX analyst at Swissquote Bank, in a note.
Against the yen, the euro eased 0.1 percent to 99.60 , off a session high of 100 yen, with Japanese exporters' bids lined up above that level. The dollar fetched 79.26 yen, off Monday's high of 79.92 yen with expectations of more easing by the Federal Reserve weighing on the greenback.
The New Zealand dollar was up 0.5 percent on the day at US$0.7778, paring gains from Wednesday, when it hit a one-month high of $0.7808.
The kiwi eased after the Reserve Bank of New Zealand said a weak economy and an uncertain global outlook meant rates need to stay at record lows. As expected, the RBNZ kept rates unchanged at 2.5 percent for a 10th straight meeting.
Forex focus: European unity may lie ahead – but for how many? - Daily Telegraph
As HiFX’s Chris Towner says: “Germany is being forced into a corner where it is they who will need to start to give up if they would like Europe to become more unified. The Spanish finance minister is right to say that the battle for the euro will be waged in Spain, but it will be decided in Germany.”
Eurosceptics suspect Germany will use the crisis to usher in a United States of Europe.
“Is there a hidden German agenda? Probably not,” answers Charles Purdy of Smart Currency Exchange. “They have always thought and made clear that greater fiscal unity is a must for the euro – ensuring that each country adopts their fiscal discipline. Up to now the political will has been lacking but if the euro is to survive and the 'weaker’ countries are to benefit from Germany’s strong credit rating then fiscal union will be what Germany expects.”
World First’s chief economist Jeremy Cook believes greater unification will take decades, saying: “Fiscal union is the endgame for the eurozone – a United States of Europe that has centralised fiscal and monetary policy and leadership based from one location. This will take years to set up and will only follow a huge upheaval of the European political landscape.”
However, while the consensus view is that the eurozone will bind closer together, this doesn’t mean that all 17 members will remain in the club.
“It is becoming increasingly clear that some nations can’t remain in the eurozone,” says Richard Driver of Caxton FX. “A stronger eurozone with a fiscal union is the only way the eurozone can survive but this won’t come soon enough for Greece.”
Stephen Hughes of Currencies.co.uk is sceptical, saying, “As a growing number of voices call for greater fiscal union across the eurozone, it’s still by no means a given that this is an achievable path – don’t forget that even the German people have yet to ratify the fiscal compact.
“But, given the depth of the current euro crisis, we are likely to see a more accommodating stance from policymakers in the coming months. What is clear is that any move to greater unity will take time to implement, something Greece certainly doesn’t have. As for Spain, Portugal and Ireland, the jury’s out for them...”
Bankers say Syria printing new money as deficit grows - Jerusalem Post
Four Damascus-based bankers told Reuters that new banknotes printed in Russia were circulating in trial amounts in the capital and Aleppo, the first such step since a popular revolt against President Bashar Assad began in 2011.
The four bankers said the new notes were being used not just to replace worn out currency but to ensure that salaries and other government expenses were paid, a step economists say could increase inflation and worsen the economic crisis.
The United Nations says Assad's forces have killed at least 10,000 people in a crackdown, and the government says more than 2,600 members of its security forces have died.
The four bankers, along with one business leader in touch with officials, said the new money had been printed in Russia, although they were not able to give the name of the firm that printed it. Two of the bankers said they had spoken to officials recently returned from Moscow where the issue was discussed.
"(The Russians) sent sample new banknotes that were approved and the first order has been delivered. I understand some new banknotes have been injected into the market," said one of the bankers. All requested anonymity.
Two other senior bankers in Damascus said they had heard from officials that a first order of an undisclosed amount of new currency had arrived in Syria from Russia, although they were unable to confirm whether it had entered circulation.
Outgoing Finance Minister Mohammad al-Jleilati said last week that Syria had discussed printing banknotes with Russian officials during economic talks at the end of May in Moscow. He said such a deal was "almost done," without going into details.
However, the central bank later denied through state media that any new currency had been circulated.
Goznak, the state firm that operates Russia's mint and has exclusive rights to secure printing technology, regularly prints money for other countries. It declined to comment.
A 'last resort'
Russia is one of Syria's major political backers and a close trading and economic partner. There are no sanctions in place that would bar a Russian firm from printing money for Syria.
Syrian money was previously printed in Austria by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of the Austrian central bank. That order was suspended last year because of European Union sanctions, an Austrian central bank spokesman said.
One of the four bankers described the decision to use newly printed money from Russia to pay the deficit as a "last resort" after several months of consideration.
Syria's deficit has swollen because of declining government revenues and loss of oil exports hit by sanctions. The government is loathe to impose unpopular measures to fight the deficit, like cutting subsidies or raising taxes.
"The deficit is there and it is already increasing and increasing quickly. And to finance it they have decided to print currency," said the senior businessman, who is familiar with the subject and in touch with monetary officials.
Bankers say a priority has been to continue salary payments for over 2 million state employees among a workforce of 4.5 million in a country of more than 21 million people.
"You cannot allow the public sector to collapse," said one of the bankers. "People are getting their wages and there are no complaints if they are paid at the end of every month. If we reach a stage where they are not paid there will be a crisis."
Syria's $27 billion 2012 budget was the biggest in its history, taking many by surprise. Bankers say the spending surge was motivated by a desire to create more state jobs and maintain subsidies to help ward off wider discontent.
The private sector has suffered large scale layoffs, but workers in the public sector have kept their jobs and had steady wages despite a salary freeze.
Financing the spending has proven difficult. The central bank has exceeded borrowing limits from public banks, and private banks are reluctant to buy government bonds, one of the bankers said.
Inflation is already running at 30 percent, although the central bank considers it manageable.
Authorities have spent state funds on subsidies to keep the prices for household utilities and petrol unchanged, and have announced planned price controls on basic commodities. However, electricity prices for big industries have risen by 60 percent and the price of subsidized diesel fuel has also risen.
The authorities plan to inject only a small amount of new currency to prevent runaway inflation, said one of the bankers.
"But there is a limit to how much fresh money could be injected into the economy in such highly uncertain times. Reckless printing of money as a way of buying short term reprieve could be economic suicide," the banker added.
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