Can Innovation Save Facebook Shareholders?

Facebook’s (NASDAQ:FB) stock has declined more than 50 percent in value since the social network went public in May. That seems like a poor indicator the company has the ability to rule the internet economy. However, with access to almost all its users’ information — from sentiments to phone numbers — the company has the capacity to reinvent digital marketing.

Facebook has been trying to follow in the footsteps of Google (NASDAQ:GOOG). Indeed four months ago Wall Street hailed Facebook as the next Google. Now stockholders and analysts alike are skeptical, and influential insiders continue to sell off shares by the thousands.

Don’t Miss: RED FLAG: Facebook is Losing This Key Support.

The company is developing a new kind of service that has no established norms or regulations. Therefore, the path to success should not be replication, rather innovation.

With access to all the information a user supplies — from basic biographical data to status updates chronicling user’s desires, opinions, and likes — Facebook has the ability to develop customized advertisements by using the voluntarily provided user information. Coupled with this wealth of data, experts deem Facebook’s platform design will be well-suited to support the next type of internet marketing.

Small steps have already been taken along this path.  Sponsored Stories, Facebook’s latest mobile platform ad campaign, have started yielding returns.

This approach to innovation is aggressive, but in the opinion of Business Insider, it is a smart one, and “the same one Microsoft (NASDAQ:MSFT) had in the two decades in which it dominated computing and built one of the world’s most powerful and valuable businesses.”

Nevertheless, Facebook has a lot of ground to cover as it attempts to banish skepticism from the minds of shareholders and the public. Here’s our in depth analysis of Facebook’s stock.