Facebook’s 5 Biggest Failures in 2012

With 1 billion users finally reached, new ad spots for web and mobile platforms helping increasing revenue and plenty of acquisitions and talent hired you would think that 2012 was the best year in Facebook’s short corporate life. Unfortunately for employees 2012 was also the focus of some very highly publicized Facebook failures including its botched IPO, continued to suffer from privacy issuses and watch a GM and other major advertisers ditched the network. Here are Facebook’s 5 biggest failures in 2012.

Facebook IPO  Fails Miserably

When Facebook decided to go public the company’s handling of its IPO and NASDAQ’s launch of company stock was all wrong and led to the biggest Facebook failure of 2012.

First Facebook told its closest private investors about revenue issues relating to ad earnings and its failed traction for mobile advertising while failing to disclose that information to the public ahead of the company’s IPO launch. When the stock finally launched at $36 per share NASDAQ systems failed to properly process orders for the first several hours of trading. Failing stock systems quickly led to mass confusion and tumbling share prices. Facebook share’s fell for more than a month as the company’s valuation went from more than $100 billion to less than $50 billion.

As if losing money wasn’t enough for Facebook, the company was soon met with various class action lawsuits for cover up financial holdings and future forecasting information regarding its stock. NASDAQ in the meantime was also sued by investors who lost billions of dollars because of broken electronic trading systems.

Facebook Sponsored Stories Ads Violate User Privacy

The idea behind sponsored stories was great. Facebook would take the pictures of users who liked a certain service, brand or various other items and pair it with an ad. By doing so Facebook could target a users friend while using their face and previous “Like” button pressing of a product as a vote of confident for that item.

Unfortunately as it has done in the past Facebook turned on the program for all users without their permission, a move that led to some embarrassing product endorsements (sometimes in cases where a fan accidentally had ‘Liked’ a product).

Facebook was once again met with a multi-million dollar lawsuit over the issue.

Facebook Sponsored Stories eventually went to an opt-in method but the damage was already done and the Facebook failure once again proved the company’s incompetence when it come to understanding users privacy demands.

 Facebook Ad Partner Fail: GM Pulls Out

General Motors made a very public play against Facebook, announcing that it was pulling out of purchased ad spots on the network. According to GM the company’s $10 million annual ad buy was not yielding any positive results from Facebook created ad spots.

The announcement came at a time when Facebook was already trying to convince investors that the social network could attract more advertising money, not lose $10 million in a single announcement.

The best to come from the GM pull out was full public support from Ford. The Detroit automakers response to GM? They just don’t understand how to be successful with Facebook ads.

While Facebook had plenty of failures in 2012 the company continues to attract millions of users each and every week and its presence is growing overseas. Throw in the acquisitions of Instagram, Face.com and other company’s and 2013 is already looking promising.

Are you surprised by some of the massive Facebook failures that played out in 2012? Were there other Facebook failures that shocked you in 2012?

[Image via Cast Software]