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.
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