Tomahawk, WI 11/19/2013 (BasicsMedia) – Facebook Inc (NASDAQ:FB) is only able to make money from ads as long as it has people on its platforms. The Menlo Park company doesn’t see sense in pursuing ads aggressively when they can end up turning away users to other social networking sites. FB knows that its money comes from ads, but it is selective, if not careful, in selecting ads that it displays. Moreover, Facebook Inc (NASDAQ:FB) also does not what too much of an ad load which can also offend some of its users.

So does this mean that Facebook Inc (NASDAQ:FB) is becoming a victim of itself? Not really, in recent times, and more especially after its big rival Twitter went public successfully on New York Stock Exchange, the world’s largest networking site has been making very calculated moves. Social networking companies re known to make billions of dollars almost effortlessly and investors cannot resist taking a position in these stocks. However, problems with social networking stocks start with loss of users. This is the same fate which befell MySpace and all those other pioneer online social networking companies which have since been drowned in the sea of competition.

Facebook Inc (NASDAQ:FB) knows that its meat can be its users poison

Delivering ads on networking sites is tricky for Facebook Inc (NASDAQ:FB) and other internet social media companies in that too much of ads can provoke some users and at the same time, the companies need to go for more advertisers to boost their revenue and profit. In any case, this is their commitment to shareholders and investors.

With the understanding that ad can both build and destroy a company, FB needs to trade this path carefully. This is why investors should be excited that Facebook Inc (NASDAQ:FB) has hired a lead auto ad manager from Google Inc. to manage its auto ad division. Auto advertising is an opportunity that FB has not exploited fully, partly because it needs to weigh a lot of options in this regard and also, that penetrating auto advertising industry requires good insight of the industry. Michell Morris who is joining FB from GOOG has both insight of the industry and strategy to turn this market profitable for FB. It has to be called to memory that sometimes back General Motors pulled ads from Facebook Inc (NASDAQ:FB), citing ineffective service. But now with Morris, the social media giant hopes to make its case in a big way in the auto industry.

FB is poised for better things in ad revenue

While FB has been careful not to explode with all manner of ads on its platforms, the company is already making billions of dollars in this “passive” advertising environment. It means that the more Facebook Inc (NASDAQ:FB) ropes in more advertisers to its networking while making sure its users are not alienated, the company still has huge potential in ad revenue collection. FB’s foray into mobile platform is also another frontier that is expected to drive up its ad revenue. Looking at the market situation in the auto industry, going for auto advertisers smells profits for FB. I think makers of new generation cars like Tesla with its all-electric cars require better exposure and FB provides the eyeballs that such companies need to drive forward their businesses.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.