83 million Facebook accounts may be fakes

Published August 03, 2012

| SkyNews

Facebook's share price has fallen below $20 for the first time, as it was revealed around 8 percent of its accounts could be sketchy.

The social-networking website is now worth almost half what it was when it floated on the Nasdaq in May.

It has lost nearly $50 billion in value -- more than the total valuation of Hewlett Packard or coffee company Starbucks. The stock debuted at $38 and since then has headed south, hit by increased doubts about its high valuation, growth prospects, and worries over its ability to make money from its growing mobile audience

Facebook's latest figures suggest as many as 83 million users may come from dubious sources -- including duplicate accounts, pages for pets and those designed to send spam.

The number of real users is critical for the company as it seeks to secure advertising revenues from the website. Some analysts have expressed doubts that the company can boost revenues.

The number of accounts grew to 955 million at the end of the second quarter, but some 8.7 percent may be dodgy, the company admitted in its quarterly filing with the U.S. Securities and Exchange Commission.

There are "inherent challenges" in measuring usage "despite our efforts to detect and suppress such behavior," the tech giant said.

It said duplicate accounts -- when one user maintains more than one account -- may represent some 4.8 percent of active users. Another 2.4 percent may be for a business, group or "non-human entity such as a pet" and 1.5 percent are likely to be "undesirable" accounts that use the accounts for spam or other malicious activity.

"We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or Australia and higher in developing markets such as Indonesia and Turkey," Facebook said.

The stock has been falling since the company released quarterly earnings last week for the first time as a public company.

Investors were disappointed despite second quarter results meeting Wall Street expectations, with revenue one-third higher than last year.

On Thursday, the share price traded as low as $19.82. It lost 84 cents, or 4 percent, to close at $20.04.

Meanwhile, professional networking site LinkedIn reported better-than-expected revenue, up 89 percent for the second quarter to $228.2 million, driven by a boost to its premium subscription service.

However the firm reported a drop in net income, down to $2.8 million from $4.5 million in the same period last year.

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