Will Facebook’s Legal Concerns Slow Its Progress?
Facebook is big enough now that it is likely to carry a permanent bullseye on its corporate chest which will be in the crosshairs of every ambulance chasing lawyer (if that ambulance is hauling around a gravely wounded IPO attempt like Facebook’s).
The Wall Street Journal is reporting that the mounting lawsuits against the social media giant could be a real problem.
Facebook Inc.’s botched initial public offering is turning into a potential legal morass for the social-networking firm, its investment bankers and the exchange on which it went public.
About 50 lawsuits have been filed against Facebook, Nasdaq OMX Group Inc. and underwriters of Facebook’s May IPO, according to lawyers involved in the cases.
There’s blood in the water so we should expect sharks. So what is the focus of all this legal attention? In the cases that involve Facebook directly it’s about what was, or more importantly was not, said about the mobile issues facing Facebook.
The bulk of the cases against Facebook and underwriters led by Morgan Stanley allege that investors weren’t told clearly enough in disclosures that the social-networking firm’s growth was suffering from a migration in customers to mobile devices from desktop computers. Some analysts are concerned about Facebook’s advertising model for mobile devices.
So what does this have to do with marketing? Plenty. As marketers that are dependent upon third party platforms to do business the health and welfare of that platform should be paramount. There is a lot at stake if time, money and additional resources are poured into something that might have stumbling blocks ahead.
Fortunately for Facebook they have the resources to fight although they did not comment for the WSJ article. But the question remains as to whether Facebook constantly being in the news facing accusations of ‘dirty dealings’ doesn’t do much to help the company’s already tattered image around trust.
So in the end will these lawsuits truly hurt Facebook? Well, that’s above my pay grade to figure out but unless they can be resolved and shelved quickly this type of reminder about Facebook’s character will chip away at any good will the company has built.
Aw heck, who am I kidding?! As long as people can post inane opinions, political missives and stay in touch with family Facebook will roll on undeterred. Or will it?