"There seems to be some perverse human characteristic that likes to make easy things difficult." Warren Buffett (81).
Funny thing this...General Motors just announced that it will stop advertising on Facebook. Claiming they've just discovered (!) that Facebook advertising is ineffective.
It's a Wall Street Journal story confirmed by Reuters (you can read it at the end of this blog) which are both business channels - the interest deepens - because an announcement like this, on business sites like these, in the days before an IPO, is peculiar to say the least.
A loss to Facebook of only circa 10 million usd but a big loss in terms of face and PR. I'd love to see Facebook take down their page as shown above.
So what's the General Motors Facebook connection?
Of course, following its bankruptcy and recent rebound, GM is owned, in no small measure (26%), by the US government.
But legendary, market influencer Warren Buffets Berkshire Hathaway has recently announced (28 minutes ago, a half hour after the Facebook news on GM) they've taken a huge financial position in General Motors! 257m dollars worth.
The same Mr. Buffett who of course, only last Monday told investors at his AGM that he won't be buying into Facebook. And now, the company he announces major investment in, pulls out of Facebook - suddenly.
"We never buy into an offering," billionaire Warren Buffett told CNN at the annual meeting for his company Berkshire Hathaway this weekend.
"The idea that something coming out ... that's being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible," he said.
At the same time, The UK Guardian comes out with "The news comes as a poll conducted by the Associated Press and CNBC found nearly half of Americans believe Facebook is a passing fad"
A passing fad???
1. General Motors pulls it advertising. Damages the Facebook IPO.
2. Same day, General Motors announces Buffett has taken major investment.
3. General motors investor, Warren Buffett, then says no to a Facebook investment. Damages the Facebook IPO.
Co-incidence.....yeah.
Let the games begin.
There's more to this than meets the eye.
(Reuters) - General Motors Co will stop advertising on Facebook, a move that comes during the same week the social networking website is due to go public.
The U.S. automaker confirmed a report by the Wall Street Journal. A source familiar with the automaker's plans said GM's marketing executives decided Facebook's ads had little impact on consumers.
GM said it will still have Facebook pages marketing its vehicles, but it will drop use of paid ads. Anyone can create a Facebook page at no cost. GM pays no fee to Facebook for its pages, which allow the automaker to reach consumers directly.
"We regularly review our overall media spend and make adjustments as needed...it's not unusual for us to move our spending around various media outlets - especially with the growth of multiple social and digital media outlets," GM said in a statement."In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers," GM said.
GM spends about $40 million on its Facebook presence, but only about $10 million of that is paid to Facebook for advertising. The rest covers the creation of content and the agencies involved, The Journal said.
GM, the country's third largest advertiser behind Procter & Gamble Co and AT&T Inc, spent $1.11 billion on U.S. ads last year, according to Kantar Media, an ad-tracking firm owned by WPP PLC. About $271 million of GM's total ad spend last year was for online display and search ads excluding Facebook advertising.
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