GM to stop advertising on Facebook, report says
By Hayley Tsukayama,
General Motors is reportedly planning to pull its advertising from Facebook, according to The Wall Street Journal.
The timing of the news is a blow to Facebook, which is set to go public this week in an initial public offering that could value the company at over $100 billion.
But if a major advertiser such as GM has found that advertising on the site is ineffective, that’s a serious problem for the social network, which relies heavily on advertising to generate revenue.
According to the Journal report, GM spends $40 million in advertising on the network — $10 million of which goes to Facebook. In its most recent filing with the Securities and Exchange Commission, Facebook said that $872 million of its $1.06 billion in revenue came from advertising.
Facebook declined to comment on the report. General Motors could not immediately be reached for comment.
Disclaimer: The Washington Post Co.’s chairman and chief executive, Donald E. Graham, is a member of Facebook’s board of directors.