Facebook at work? They will be in Dubai
The social networking giant will be opening an office in Dubai Internet City, with a focus on winning advertising revenue from the region, sources said. Facebook is the most popular social-networking site in the UAE, with 54 per cent of the population using the site, according to the Arab Media Outlook and Arab Advisors Group.
The company listed on Friday on the Nasdaq in New York, raising US$16 billion (Dh58.77bn). The flotation valued the company at $104bn.
But the shares have experienced a turbulent ride since the offering, falling yesterday for a third day in a row yesterday. In early trading on the Nasdaq in New York, the shares hovered at about $33.01, 3 per cent down from Monday's closing price.
Morgan Stanley, the Lead Underwriter for the flotation, was believed to have bought shares on Friday to keep Facebook from falling below $38. Doubt has been cast over Facebook's business model, after one of its biggest advertising clients pulled its campaign last week. The car maker General Motors said it would withdraw its $10m Facebook advertising budget. It did, however, say it would continue to use the site's free functions.
GM's pullout raised concerns over Facebook's valuation and long-term prospects. Yet some advertisers in the Middle East, including Emirates Airline, have said that they have no plans to discontinue advertising on the website. Analysts have, however, noted that digital advertising revenue is relatively low in the region.
In the first three months of this year, Facebook's earnings fell to $205m from $233m in the same period last year. The company's revenue increased to more than $1bn in the first three months of the year.
Facebook was launched by its Chief Executive, Mark Zuckerberg, and several colleagues, at Harvard in 2004 and now has more than 900 million users around the world. The site reported net income of $1bn last year.
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