Facebook Inc (NASDAQ:FB) On The Verge Of Making a Deal With GM

Facebook Inc (NASDAQ:FB) On The Verge Of Making a Deal With GM

Facebook Inc (NASDAQ:FB) seems to be receiving a second chance from General Motors (GM) to prove its worth as an advertiser. Both the companies are in talks for mending their failed relation after GM, one of the biggest advertisers, had withdrawn its advertisements from Facebook before the latter’s IPO.

The reconciling of the failed out relation will benefit Facebook Inc in many ways including a boost in the Company’s public image as an advertiser and also increase its revenue. The Company had been receiving around $10 million from GM for the advertising on the social network site in addition to a $30 million payment received for creating and maintaining web pages for GM.

Facebook Inc. is scheduled to report its second quarter results on July 26, 2012. The Company will be reporting its quarterly results after the IPO fallout it had created. The fall out was based on investors’ fears of the Company’s future revenue growths which had been declining. Morgan Stanley, the underwriter of the one of the biggest IPO’s had a day after the IPO reduced its FY 2013 estimates to reflect the declining revenue growth as disclosed by FB in its S1 form.

Shares that had opened IPO at $38 went declining as low as $25.52. The number of mobile users for the social networking site has been growing with the revenue generation from this being quite low. This had been followed by a decreasing use of the site on desktops thereby creating concern over the Company’s revenue generation abilities.

Share of FB are down 0.10% to $31.15 in the pre-market session.