Tag Archives: short

Short term shipping deal signed

Updated February 21, 2013 09:01:00

Tasmanian businesses have negotiated a short-term solution to the state’s international shipping crisis.

The Rio Tinto subsidiary, Pacific Aluminium, has struck an interim deal with Swire Shipping to export aluminium from its Bell Bay smelter to Asia.

There is likely to be capacity on the ship for several exporters.

The announcement will be made today, ending two years of uncertainty for businesses that have been paying more to send their goods via Melbourne.

The triple-A consortium abandoned its Bell Bay to Singapore run in 2011.

Late last year, Swire proposed a service every 18 days from Bell Bay to Townsville, Shanghai and Hong Kong.

It is understood there is no ongoing taxpayer funding involved in the deal.

It comes almost a week after the Tasmanian Opposition promised to spend $33 million to underwrite a shipping service if its wins government.

The Tasmanian Opposition says a short-term international shipping service will not resolve the crisis faced by exporters.

The Opposition says the deal does not address the broader international freight task.

Topics: sea-transport, business-economics-and-finance, tas

First posted February 21, 2013 05:34:06

Virgin flight cut short in dispute over sandwich

Updated January 11, 2013 00:18:35

Passengers on a Virgin Airlines flight from Darwin to Perth say their plane was forced to turn back because of a heated argument over the price of a sandwich.

The plane left Darwin about 7.00am (ACST) Thursday and had been in the air for about an hour when a male passenger began yelling at flight attendants.

Passengers Kirsten and Claudia Lloyd say the crew hand-cuffed the man and took him to the back of the aircraft.

“It kind of started over a sandwich, I think,” one said.

“Yeah, $10 for a sandwich, I think it was.

“Then he got all hyped up and started pushing all the flight attendants down the aisle.”

A Virgin Australia spokeswoman says the captain decided to return to Darwin because of the passenger’s “disruptive” behaviour.

Australian Federal Police say the man has been taken to Royal Darwin Hospital due to concerns about his mental health.

The flight was further delayed by police inquiries.

Most passengers have been transferred to other services and the last of them were expected to arrive in Perth late on Thursday night.

Topics: air-transport, police, darwin-0800, perth-6000

First posted January 10, 2013 17:16:03

Iron ore price rebound may be short lived


Resources analysts in Perth say the recent surge in the spot price of iron ore has been a shock.


Chinese spot iron ore prices have almost doubled from a low of around $US87 a tonne in September to $US156 a tonne overnight.


Restocking by China and a lack of supply from India are among the reasons for the price jump.


The major mining stocks like Rio Tinto and BHP Billiton have rebounded in line with the price increase for the steel making ingredient.


However, Patersons Securities resources analyst Tim McCormack says he does not think the gains will last.


“If you look back over the past three years, the March and June Quarters are traditionally quite strong and that follows by a dip in September,” he said.


“Our calendar year average this year is $US128 dollars currently. We’re well above that in terms of price at the moment, but we think that in the second to mid part of the year we’ll probably come back toward that average.”


Tim McCormack from Patersons says the price falls could be bigger if demand from China dries up.


“If stockpiles do reach near capacity again and there’s not a huge demand for steel – if there’s not the concerted Chinese stimulus that drives the demand for steel – then these stockpiles may get drawn down, and the price will relax like we saw in September and October last year.”

Topics: business-economics-and-finance, iron-ore, wa, australia

India 2G auction short of target

 The auction of the 2G telecom licenses has been marred in controversy India’s latest auction of mobile phone licences has fallen flat, raising less than a quarter of the money the government had targeted.


The auction for second-generation (2G) mobile phone licences raised 94bn rupees ($1.7bn; £1bn). The government had wanted closer to 400bn rupees.


Many companies had complained that prices were set too high.


An earlier sale of the licences was annulled by the Supreme Court after a corruption probe.


The previous licences were issued by former minister A Raja, who is accused of mis-selling the bandwidth in what has been called India’s biggest corruption scandal. Mr Raja, who is currently on trial for fraud, has denied any wrongdoing.


Government auditors say the scandal cost the country about $40bn (£24.5bn).

‘A big embarrassment’ Continue reading the main story
ll in all, a big embarrassment for the Indian government, but one could see it coming”

End Quote Prashant Singhal Ernst & Young The auction has been marred with controversy as firms not only complained about the high base prices, but also alleged that the limited amount of bandwidth being offered had deterred many bidders.


“The limited amount of spectrum… was guaranteed to have a very detrimental impact on the auction,” said Rajan Mathews, secretary general of the Cellular Operators Association of India.


“We said that the high reserve price would ensure that limited players come into the bid and that is exactly what we have seen.”


In a big blow to the government, four circles, including Mumbai and Delhi did not attract any bids.


There were also no takers for the all-India licence.


“All in all, a big embarrassment for the Indian government, but one could see it coming,” said Prashant Singhal, telecom industry leader, at Ernst & Young India.


The lacklustre response to the 2G auction contrasts with the 2010 sale of faster third-generation (3G) licences that fetched the government nearly $15bn.

Sindh flourmills get wheat short of demand

KARACHI: Sindh wheat supply price per 100 kilo is higher by Rs50 than that of Punjab, while the Sindh food department is supplying wheat to the flourmills less than their monthly demand, leaving no possibility of any cut in the flour prices.

Sindh flourmills said that per month wheat consumption in the province stands at 2.5 lacs ton, while as compared to that provincial food department is supplying only about 1 lac ton at Rs2,850 per 100 kilo and owing to short supply the mills are compelled to buy wheat from the open market at higher prices. In this backdrop, there is no possibility of flour price coming down.

Flourmills have demanded from the food department that wheat supply to the mills be made freely instead as per specified quotas besides like Punjab, Sindh government wheat price also be fixed at Rs2,800 per 100 kilo.

Experts said that Sindh food department has stocks of over 12 lacs tons of wheat, therefore, this should be utilized for providing relief to the people instead of letting it rot.

China faces foreign short attacks

Shanghai: Foreign short-sellers are telling China it has a credibility problem, and Beijing seems to be listening.


Investors are betting that many Chinese companies listed on overseas exchanges will lose substantial value or even delist, with green energy and technology companies — two sectors championed by the government as key to China’s transition from a low-cost manufacturer — among the most targeted.


Not so long ago, Beijing could have ignored the foreign calls for greater transparency or doubts about business models, even after investors were burnt. The China story of limitless growth sold itself, and investors were keen for any entry into the world’s biggest growth engine.


But now Chinese companies need to access overseas markets to tap funding for their domestic growth. And so Beijing is taking steps to address some of the concerns, including a tour to meet foreign mutual fund managers and other investors.


Article continues below


“I think Chinese regulators are quite concerned about the competitiveness of these firms if they are lagging behind in terms of access to capital markets,” said Douglas Jiang, a Washington DC-based research analyst at Snowball Finance.


Unlike the high-profile short-selling attacks of 2010-2011, which mostly targeted unknown small-cap firms that had used a loophole to gain listings on overseas exchanges, the short money is now betting more broadly against some of China’s better-known internet and clean technology firms.


“The first time around they were caught off guard. The companies that were being targeted were very much private companies. They were under the radar screen,” said Fraser Howie, analyst at CLSA and co-author of several books on China’s financial system.


“This time around it’s not the same guys. These are more the financial flag bearers for China … (Regulators) are clearly doing more to bring foreigners into the market, so the last thing they want is more short-selling.”


A short-seller borrows shares from a stockholder, paying them interest. The stocks are then sold, with the shorter banking the proceeds. To make a profit, the shorter needs the shares to lose value before they are returned to the owner.


Share utilisation ratios (URs) — which measure how many shares available for lending are out on loan, and are considered a proxy measure of the shorting of a stock — are unusually high for many Chinese firms listed abroad, according to data from financial information provider Markit viewed on September 21.


Further, the interest rates to borrow those shares are also high – up to 50 per cent in some cases — indicating lenders see imminent risk of prices declining and are seeking protection.


The ratio for Chinese companies with American Depositary Receipts (ADRs) trading in the US was 12.91 per cent, over three times that of lendable shares of firms making up the S&P 500 index.


Solar power and dotcom firms comprised the majority of the US-listed Chinese ADRs with the highest URs. Chinese companies listed in Hong Kong also featured high URs in many cases, but were more widely distributed among sectors including real estate and finance.


“A high utilisation ratio means a lot of people are short the stock. I think there’s a big credibility factor on a lot of these stocks that are short,” said Gerard DeBenedetto, CEO of AZ Investment Management in Shanghai


That said, that foreign distaste for Chinese firms in globally troubled sectors like solar energy should not be misconstrued as prejudice against all Chinese firms.


“It’s not systematic. For foreign investors, it’s about transparency,” DeBenedetto said.


Data on mutual fund flows from Lipper, a Thomson Reuters company, shows net flows into China-focused offshore equity funds have been negative for the last six quarters.


Rob Morris, head of forensic accounting at AlixPartners in Hong Kong, said it has become increasingly difficult to access filings Chinese companies make to the State Administration for Industry and Commerce, which can be used to double-check statements Chinese firms make to foreign investors.


There are signs that China understands it needs to do more to improve investor confidence, although analysts say progress so far has been largely symbolic. They would like to see Beijing follow through on commitments to crack down on insider trading and make management teams more accountable to shareholders.


Officials from the Shanghai and Shenzhen stock exchanges embarked on a global tour in September aimed at restoring overseas investors appetite for Chinese equities, in particular mainland-listed companies available through the Qualified Foreign Institutional Investor (QFII) programme.


Beijing may also be finally warming to the prospect of US regulators double-checking the work of Chinese auditors. An official at the US Public Company Accounting Oversight Board (PCAOB) said on September 21 that US authorities have reached a tentative agreement with Beijing to allow them to observe official auditor inspections in China.


If the deal is finalised, it would mark a change in attitude from a year ago, when an official at the Shanghai stock exchange accused the PCAOB of politicising the auditing issue, and encouraged Chinese companies listed in New York to delist and come back to IPO in Shanghai or Shenzhen.


The last thing Chinese regulators want these days is a raft of returnees trying to list on already struggling domestic boards, nor do they want such firms to line up at overburdened Chinese banks for fresh capital.


“I think in an ideal world, Chinese companies ought to by default list in China,” said Kai-Fu Lee, former head of Google China, now CEO of technology incubator Innovation Works.


Lee, who played a prominent role in publicly defending Qihoo 360 Technology Co. Ltd from short-sellers, said Chinese companies do need to become more transparent to attract foreign money.


“I do think it’s a wake-up call for (company executives) to really realise that going public in the US is not just about sourcing your money from a different group of investors, it’s about a commitment to communicating.”

PrintEmail a friend More from Markets DFM, ADX indexes move in opposite directions NBAD in Hong Kong places bond IOSCO recommends limits on money funds China faces foreign short attacks

Nissan well short of sales target for Leaf electric cars

Saturday, 29 September 2012 04:26 Posted by Abdul Ahad

Nissan logotype1DETROIT: Nissan Motor Co is falling well short of its goal of doubling sales of its Leaf electric car this fiscal year as sales in the United States are particularly weak despite high gas prices.

While Nissan Chief Executive Carlos Ghosn set a target of doubling global Leaf sales in the current fiscal year that runs through March 2013, the pace will need to increase dramatically as they are up only 9 percent in the first five months through August.

Leaf sales in the United States are down 56 percent from April through August, and down 31.5 percent this calendar year.

Nissan North America spokesman David Reuter said US sales should improve once it ships more to the markets where it sells best. Leaf debuted in December 2010 in Japan and in seven metropolitan areas in the United States.

Leaf is not the only EV to struggle in the US market. General Motors Co’s Chevrolet Volt plug-in hybrid car has come up short of expectations, forcing the US automaker to idle the plant that makes the car. In addition, Fisker Automotive’s Karma plug-in has experienced numerous problems and was just panned by Consumer Reports for being “plagued with flaws.”

Overseas, however, Leaf has fared better. Sales so far this fiscal year are up 125 percent in Japan, where demand was hurt last year by the March earthquake and tsunami. They are also up 207 percent in Europe, where the Leaf did not roll out as quickly.

Nissan has sold 37,285 Leaf since it was introduced. Of that figure, 17,710 have been sold in Japan; 13,921 in North America; 4,881 in Europe; and 773 in other markets, Nissan said.

LEAF BUY BACK

Unrealistic expectations among US consumers about EVs also have hurt as Nissan agreed to buy back two Leafs from unsatisfied customers in Arizona, where seven owners have been vocal in online forums about their dissatisfaction, mainly over the shrinking of energy storage capacity of their lithium-ion batteries.

Reuter said the Arizona drivers were operating their cars beyond Nissan’s recommendations. When tested by company engineers, all seven cars were performing within expectations, he said.

The Leaf is “not for every driver,” said Reuter.

“You need to make sure your driving style and driving needs fit the output of the vehicle,” he said. “We know that the wide majority of US drivers drive no more than 40 miles a day. The Nissan Leaf is a perfect vehicle for those individuals. For those who drive more than that, it may not be.”

The Arizona drivers were using and recharging their batteries at a faster rate than most Leaf drivers, causing the batteries to lose capacity quicker than the manual told them to expect.

The affected Leaf owners were averaging 16,500 miles annually, Reuter said. The car’s owner’s manual says that under normal conditions and with average annual mileage of 12,500, the energy storage capacity of a Leaf will drop to 80 percent in five years, Reuter said.

The customers in Arizona became concerned when their Leaf models, with an average age of about 15 months, were down to 84 percent or 85 percent already, he said.

A battery’s capacity shrinks relatively quickly in the early stages of use and then tapers off, Reuter said. By the time a Leaf battery is 10 years old, it will have about 70 percent of its initial capacity, he said.

TENNESSEE LEAF PRODUCTION

The Leaf is in its first generation. The company has not said when it will introduce the second generation, but the new 2013 model will have some different features, which Reuter would not divulge.

The 2013 Leaf will be introduced in the US market in the first quarter of 2013, the same time production of Leaf models will begin at the Nissan plant in Smyrna, Tennessee. So far, all Leaf cars have been made in Japan.

The Leaf battery plant next to the Smyrna assembly plant will open within a few days, Reuter said.

It will have a capacity to produce 200,000 lithium-ion batteries a year. The assembly plant will be able to produce up to 150,000 Leaf models a year, well beyond expected demand in the near-term.

Demand nearing peak: Cough, cold medicines in short supply, say pharma firms

Govt has not releas­ed raw materi­al, spurio­us drugs may flood market.  The shortage of cough and cold medicines will surely result in a sudden rise in many counterfeit and spurious drugs. CREATIVE COMMONS

KARACHI: 

The government, in the aftermath of the ephedrine scandal, has not released quotas for raw material necessary in the making of medicines that cure cough and cold, which will very likely result in a flood of counterfeit and spurious medicines, say representatives of pharmaceutical companies.


A statement, released here on Thursday, quoted Dr Mohammad Hadi, a pediatrician, as saying people mostly catch cough and cold in September and unavailability of locally manufactured quality medicines will lead to an epidemic, especially in northern areas.


The shortage of cough and cold medicines, according to Hadi, will surely result in a sudden rise in many counterfeit and spurious drugs. The medicines, which are short in the market, include Actifed including Actifed DM syrup, Actifed cold, Actifed P tablet; Sancos cough syrup and Erythrocin, a medicine for throat infection, he said.


Owing to delay in allocation of quota for narcotics ingredients, including ephedrine, some more important drugs are short in the market. Among these are Thyroxine tablet, Vancocin injection, Cardarone tablet, Inderal tablet, Benadryl syrup, Xanax tablet, Lexotanil tablet, Ativan tablet, Betnesol N drops, Betnesol tablet, Polyfax eye ointment, Hydryllin DM syrup and Arinac tablet.


In the last meeting on quota allocation, the Narcotics Control Board of Drug Regulatory Authority allocated only two multinational pharmaceutical companies 2,000 kg of ephedrine against their requirement of 29,000 kg, the statement said.


It said the allocation of ephedrine was just 25% of the pharmaceuticals’ requirement while one pharmaceutical company that makes cough and cold syrups has not been allocated ephedrine at all.


As per norms, the statement said, the allocation of narcotics ingredients takes place before the start of every year for timely production of drugs by the manufacturers and their timely availability. But this year, only 25% of the quota has been allocated and that too in the middle of the year, it said.


Published in The Express Tribune, September 7th, 2012.

Next Generation Innovations: CEO’s experience helps IT start-up excel in short time

Compan­y founde­r asks aspiri­ng entrep­reneur­s to work with start-ups before launch­ing their own compan­y.  “Before launching his own company, one should work with start-ups and learn how to build a company from scratch,” suggested Farzal Dojki

KARACHI: 

Despite the economic slowdown, Pakistan’s information technology sector recorded an average 15% growth during the last three years, the former managing director of the Pakistan Software Export Board, Zia Imran, had said in an interview with The Express Tribune, citing the country’s talented workforce and rapidly growing entrepreneurship trend as the main contributors.


In order to document the stories reflecting this growing trend, The Express Tribune interviewed an IT professional, who even worked with the world’s largest brokerage firm, before starting his own company because of losing his job.


“Before launching his own company, one should work with start-ups and learn how to build a company from scratch,” suggested Farzal Dojki, founder and CEO of Next Generation Innovations (Next Geni) – one of the many successful start-ups acting as catalysts for the growth of Pakistan’s IT industry.


It is the experience of working with start-ups that helped Dojki’s company, which develops software and deals in business process outsourcing (BPO), excel in a short time.


Launched in 2009, Next Geni’s revenues may not be very high, but the company, which employs 29 people, recorded an impressive growth of 300% in the last two years.


A computer science graduate from the University of Texas at Austin, Dojki, between 2002 and 2004, worked for Merrill Lynch – the world’s largest brokerage firm back then.


Dojki, who also holds a masters degree in information systems from New York University, then joined Bearing Point – a consulting firm based out of NYC.


“I had to come back to Pakistan anyway because my siblings had settled abroad and I wanted to stay with my parents,” he said.


His interest in working with smaller companies and with even smaller teams took him to three start-ups as an employee. He relates the success of Next Geni to his experience of working with the start-ups.


In 2005, he joined C Track, which was launching Tracker Direct Insurance. Working for Tracker was an interesting experience, he said, adding it taught him how to build a start-up from scratch.


He then worked for another start-up Pixsense – a company started by two Pakistani boys based in California, for developing mobile phone apps for pictures and their immediate sharing. He worked for them from Karachi.


This, too, was a very good experience as Pixsense was a good company and had clients like Vodafone, Dojki said.


The third start-up he worked for was Amana – a mobile payments company just like easypaisa. The company closed after being hit by recession.


After he remained unemployed for six months, he decided to launch Next Geni. However, it took him a while before the company made some progress.


Being a new company with no prior experience, it was not easy to find clients in the beginning, Dojki said, as this usually happens with all BPO start-ups. “It was the connections of friends and family that earned us our first five contracts.”


“iTeleport, a high flying start-up based in Silicon Valley, was my first customer,” he said. “The company was run by a Pakistani boy and my friends and family connected me with him.”


After they got first few contracts, things went rather smoothly for them. Once struggling to get contract, Next Geni is now expanding its footprints in Europe and may also launch an office in the US.


“We recently opened an office in the UK. We wanted to make sure that we can also sign contracts from our UK office especially,” he said, “because some clients feel more protected in doing business from a place like London – one of the world’s most sophisticated cities for business and finance.”


“We don’t yet have an office in the US, we are virtually present there though,” he said, adding, he frequently visits the US for getting more business.


Published in The Express Tribune, August 12th, 2012.

Historic Facebook debut falls short of expectations

The compan­y had priced its IPO at the top end of its target range and increa­sed the size of the offeri­ng. Zuckerberg marked the debut of his company’s shares at the company’s Silicon Valley campus, symbolically ringing the opening bell for stock trading on Friday morning. PHOTO: AFP

SAN FRANCISCO, USA: The historic initial public offering (IPO) of Facebook Inc did not go as planned on Friday, as the social networking company’s sky-high valuation combined with trading glitches left the stock languishing near its offering price at the market close. Facebook shares, which opened up 11 percent, closed at $38.23 after a nail-biting last half hour of trading when the shares dipped to their $38 IPO price.

Most investors had predicted a first-day pop. More than 576 million shares changed hands, setting a trading volume record for US market debuts. The company had priced its IPO at the top end of its target range and increased the size of the offering, becoming the first US company to go public with a valuation greater than $100 billion.

Facebook founder and Chief Executive Mark Zuckerberg, 28, who retains voting control of the company and whose personal net worth is now about $20 billion, marked the debut of his company’s shares at the company’s Silicon Valley campus, symbolically ringing the opening bell for stock trading on Friday morning. Wearing his trademark black hoodie, Zuckerberg hugged and high-fived Sheryl Sandberg, Facebook’s chief operating officer, who is credited with bringing crucial business discipline to a company founded in a Harvard dorm room eight years ago.

The area outside Facebook’s offices was packed with throngs of photographers, more than a dozen television trucks, and a TV news helicopter hovering overhead. Outside of Nasdaq headquarters in New York, crowds also gathered, even as exchange officials struggled to sort out technical problems related to the huge volume of orders, which delayed the start of trading in the stock by 45 minutes and left investors guessing for more than two hours about whether their buy and sell orders had actually been executed.

The shares attracted interest from investors of all stripes, reflecting the social network’s extraordinary growth and deep store of information about its 900 million users. The IPO minted thousands of new paper millionaires among Facebook’s 3,500 employees — and a handful of billionaires among its founders and early investors. But the stock debut took place in a weak market, and traders said the smaller-than-expected first-day pop reflected the very aggressive pricing of the offering and a last-minute, near 25 percent increase in the number of shares being sold. Analyst predictions of first-day gains had ranged from 10 percent to 50 percent.

“The increase in size was a big negative factor for us,” said Tim Ghriskey, chief investment officer at Solaris Asset Management, who said he canceled some orders for the shares.

The IPO price was equivalent to more than 100 times historical earnings, compared with Apple Inc’s 14 times and Google Inc’s 19 times. For many investors that made it a risky bet.

“We have got some unhappy guys out there,” said Wayne Kaufman, chief market strategist at John Thomas Financial, a retail broker on Wall Street. “They were hoping for Facebook to be considerably better. I bet there are a lot of disappointed people in the market.”

Market participants said that in the final run-up to the IPO, much of the demand was from retail investors rather than institutions. When the stock fell to $38 on Friday morning, traders say the IPO’s lead underwriter Morgan Stanley stepped in to prevent the price from slipping below the IPO level.

From Facebook’s perspective, a small increase in the stock showed it was priced perfectly for Zuckerberg and early investors, who pocketed maximum gains and left little of the easy money on the table.

“You want to price the offering correctly. Institutional buyers get a little bump and the company raises the right amount of money,” said Kevin Hartz, co-founder and CEO of Eventbrite, an online ticketing startup that is integrated with Facebook’s platform.

“If the stock has a massive bump on day one that means you misread market demand and company does not raise the right amount of money.”

Battle of the giants

Facebook faces many challenges as it takes its place beside Google, Apple and Amazon.com Inc as one of the giant public companies defining the next-generation Internet economy.

Google in particular views Facebook as a mortal threat and is moving aggressively to integrate social networking features across its products. At the same time, scores of young companies are building new products and services, in some cases on top of the Facebook platform and in some cases in competition with it, and attracting huge amounts of investment capital.

A handful of such so-called Web 2.0 companies, including Zynga Inc, LinkedIn Corp, Yelp Inc and Groupon Inc, have already gone public, and others have been acquired by the industry giants. In a sign of the volatile nature of highly valued Internet stocks, all these shares fell on Friday in sympathy with Facebook’s weaker-than-expected debut. In particular, social gaming company Zynga, which relies on heavily on Facebook and also provides more than 10 percent of Facebook’s revenues, fell by more than 14 percent. In an indication of the land grab now under way in the Internet world, Facebook in April spent $1 billion to acquire Instagram, a tiny photo-sharing company with lots of users but no revenue.

A Facebook rival, social scrap-booking site Pinterest, raised money earlier this week at a valuation of $1.5 billion in a sign that venture capitalists and other private investors still see enormous potential in Web 2.0 companies. Facebook’s formidable assets include 900 million users around the world, many of whom spend hours a day on the site and share enormous amounts of personal information.

That in turn enables Facebook to target its advertising to peoples’ specific interests, and many analysts believe the huge store of personal information gives Facebook an advantage that Google and other cannot match.

“Literally everything you see on the Internet, you could see inside Facebook — but done with much more of the social graph built into it,” said Siva Kumar, CEO of e-commerce company TheFind. “In a way they operate the mall, and everybody in the mall will pay some way or the other to Facebook.”

Facebook posted $3.7 billion in revenue in 2011 and $1 billion in profit. Analysts say the company has untapped opportunities in mobile computing, and potentially other Internet services such as email and search. Zuckerberg, though unproven as a public company CEO, is widely admired as a product visionary who has done a masterful job in continually improving the Facebook experience.

Skeptics, though, note that only a small percentage of Facebook users respond to advertising on the site. Google retains a big advantage in that regard, because advertising related to specific Internet searches is by nature far more relevant and thus more valuable. In a sign of the challenges ahead for Facebook, the nation’s third-largest advertiser, General Motors Co, said last week that it was canceling its paid advertising on the site. Global Equities analyst Trip Chowdhry said the stock debut was “lackluster” because Facebook’s growth prospects do not justify a high stock valuation.