Facebook Inc's investors and other proponents of the social network like to say that it captures one of the greatest concentrations of human attention on the planet and thus offers a boundless opportunity for advertisers.
But Facebook Chief Financial Officer David Ebersman on Wednesday cast doubt on those assertions by suggesting that there may be a limit on how many ads Facebook can show users before they get turned off.
Ebersman's warning carries far-reaching implications for not only Facebook but also other social media companies including Twitter Inc, which is in the middle of a roadshow to promote its initial public offering to investors.
Twitter has yet to turn a profit but it is pitching an advertising business model similar to Facebook's.
Seven-year old Twitter faces an additional challenge: its active user base, now at 230 million, has expanded much more slowly compared to Facebook, due in part to its struggle to retain newcomers. A recent Reuters-Ipsos poll found 36 percent of Twitter users do not use the online messaging service.
Twitter is trying to expand its ad business in other ways. This week it closed a $350 million deal to acquire MoPub, an ad network that serves ads within mobile apps.
Source: Reuters
