What's the new plan? That includes GM keeping a presence on Facebook, but not through paid advertising, The New York Times reported Wednesday.
Facebook has already made a number of moves on its own in recent weeks to give investors cause for concern. In March, Facebook revealed it had purchased 750 patents from IBM. In a separate deal, it purchased $550 million worth of patents from Microsoft, which had recently bought $1 billion in patents from AOL.
Facebook then purchased photo-sharing Web site Instagram for $1 billion in a deal struck, apparently, by Facebook founder Mark Zuckerberg without informing his board of directors he was about to do so.
Now, just days away from Facebook's initial public offering, one of its biggest advertisers says it is not cost-effective to pay for advertising on Facebook, but it does pay to have a presence there.
What looked like an unstoppable juggernaut of a business just 8 years old, now looks like a potentially reckless investment -- a behemoth run by an under-30 autocrat who shows up on Wall Street to meet with some of the world's most prestigious bankers wearing sneakers, a T-shirt and a hoodie.
Nothing says I own you more than underdressing for an occasion. Leave it to the plebeians to dress to impress.
It turns out, Zdnet reported, Zuckerberg may have even paid more for Instagram than was originally reported. That's because the $1 billion figure is based on $300 million in cash, plus 23 million shares of Facebook. Should Facebook do well with its IPO, the deal for the 19-month-old, free photo-sharing company with 13 employees could be worth considerably more than $1 billion. Similarly, if Facebook shares go up in value in the future, Instagram's investors will have done even better.
But the central question remains unanswered. That question revolves around the intrinsic value of company that includes almost a billion members who, logic dictates, are not there primarily to shop.
Facebook was built on the philosophy that advertising played second fiddle to the social functions of the Web site. Build up a great brand and nearly a billion members and the advertisers will come knocking on our door. How could they resist?
This week, Facebook said it would increase the number of shares it offered for sale to 421 million, a 25 percent jump from its previous offer. The sales price is expected to start near $38 per share, which would raise $16 billion.
This could increase to $18 billion, should shares set aside for high demand be sold, as well.
Overall, that could make Facebook worth $104 billion or so -- give or take an advertiser or two.
In international markets Wednesday, the Nikkei 225 index in Japan lost 1.12 percent while the Shanghai composite index in China fell 1.21 percent. The Hang Seng index in Hong Kong plunged 3.19 percent while the Sensex in India declined 1.85 percent.
The S&P/ASX 200 in Australia gave up 2.36 percent.
In midday trading in Europe, the FTSE 100 index in Britain slipped 1.01 percent while the DAX 30 in Germany shed 0.94 percent. The CAC 40 in France was almost even, dropping 0.02 percent, while the Stoxx Europe 600 slipped 0.89 percent.