I use Facebook (NASDAQ:FB) actively, for myself and my business. It makes it very easy for me to gather and send information without much stress or effort. However, despite the benefits, I have always wondered how and if Facebook makes any real money.
Due to my experience in the markets, I cannot help wonder about Facebook's profitability. Now that Facebook is a publicly traded company it seems that they do in fact make money; but those profits could be the result of a fraud.
It has come to the attention of many people, that "promote" their page by paying Facebook to advertise for them and get more listings on news feeds across the world, that the people liking the pages are coming from many very odd places. The term being used is a "click farming," people paid to like pages or click on ads like the one that will border this article. It has now been proposed that Facebook is manipulating "likes" and pretending to have a bigger influence than they really do.
The attached YouTube videos are very interesting as well as the attached article by investor Barry Ritholtz.
(I do not own FB stock or have an active short position against the stock;yet)
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in FB over the next 72 hours.