Facebook opened at 38 and it's down to 24 (7/28/2012). Facebook has earned less money than expected.
I don't know where Facebook's money was supposed to come from, but Facebook claims advertising pays the bills:
Ads help keep Facebook free
From the beginning, the people who built Facebook wanted it to be free for everyone. It now costs over a billion dollars a year to run Facebook, and delivering ads is how Facebook pays for this.
You see personalized ads
Facebook tries to show you the ads you’ll be most interested in. These ads are chosen based on the things you do with Facebook such as liking a page, and info Facebook receives from you and other sources. Dig into the details.
You can impact the ads you see
Unlike ads on television, you can influence which ads you see on Facebook. Spot something that doesn’t interest you? Click the X and it’s gone.
Except ads are obviously not paying as expected. There are two reasons for this, one obvious and fixable, the other simply weird.
The obvious problem is that when i use Facebook.app I don't see ads. I assume that's why Facebook is working with Apple on a unified iOS/OS X integration strategy that will bring ads to mobile. (It's funny how many geeks claim it's app performance that's driving the rewrite.)
The weird problem shows up in my web browser. I see ads in my browser, but they are uninteresting or annoying.
It's not I'm immune to advertising. I pay for a Silent Sports subscription so I can read their ads. So why can't Facebook give me interesting ads?
It's not that I don't try to help. I visited their 'interests' page -- but they didn't list any of my interests (I ran into the same problem with Google's ad-interests page years ago.) I "x out" the fb ads that are annoying or uninteresting, but I still don't get anything interesting. Facebook's two year old ad voting isn't working.
I'd love to read an article on why Facebook's ads are so poor, and why Google's are only somewhat better. The best minds of today's young are spent trying to get me to click on ads, I'm trying to help them, and it's not working. I get better ads on the rare occasion that I watch broadcast TV, and much better ads in magazines.
I can think of three possible causes. One is that the products and services I buy from don't need Facebook ads. They get more mileage from Facebook's free Pages. Another is that Facebook's leadership is mediocre and delusional. (I think the era of mega-wealth is making that age-old problem worse.) Lastly the real profit in facebook ads may come from exploiting the same population that watches daytime tv; I'm not worth bothering about.
I suspect all three answers are correct. Unless Facebook can do a great deal with Apple, or figure out how to make Pages pay without killing them, or come up with a new business model, their share price is going to be stuck in the 20s for years to come.
I really do need to learn how to make bets on relative spreads. 
- Why are Google and Facebook ads so crappy? 4/2012
- Facebook changing: it's not about friends or games any more ... 7/2012
- Facebook has the eBay disease - the Farmville story 11/2009
- Facebook's ad voting - fascinating 7/2009
- 21st century TV - preying upon the weak 3/2011
- Facebook's Ads Are Terrible, It's Amazing The Company Will Do $4 Billion In Ad Sales: Apparently an analyst named Rich Greenfield wrote on this pre-IPO, but it looks like his share price estimates were optimistic.
 John A, I still have the notes you gave me! The linked article is about making bets on single trends, I'm more interested in bets on relative trends. (Ex: Divergence between Facebook/Google share prices over an 8 month period.)
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