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Facebook Disappoints Users with Another Outage, Falls 3.8%

"Sorry, something went wrong. We're working on it and we'll get it fixed as soon as we can" was all FacebookFB users could see yesterday for at least 40 minutes to an hour as the platform had yet another outage at approximately 3 pm EDT.

Had it been an uncommon occurrence, investors would have taken it lightly, but this was the third such instance in a month and the second time this week!

No wonder shares slid 3.84% yesterday, reflecting their disappointment.

Angry users vented their frustration on other social media platforms, especially on micro-blogging site Twitter TWTR with the hashtag #facebookdown.

So What's Going Wrong for FB?

Last Thursday, when Facebook was down, the company had stated that a few of its engineers meddled with the system that led to the outage spanning around 14 minutes. This time around, a post from a Facebook engineer states that the outage was owing to an issue in its Graph function.

Graph is one of the most important application programming interfaces for the platform as this is what connects everything we see on Facebook (posts, photos, statuses, people, groups and pages) to each other.

However, the company did not explain why the function faltered suddenly. It could well be the result of another experimental attempt by a few Facebook personnel.

Implications

Facebook, which is taking all possible measures to get more and more people onboard and keep them engaged for longer periods of time, hasn't been spared for its shortcomings.

Not only has its shares plummeted, but it has also lost out on advertisement revenues.

Research reports from fastcompany.com and The Street have estimated Facebook's loss in ad-revenues for each hour to be around $0.8 million and $1.7 million, respectively.

Though the amount may not be significant for a company as big as Facebook (with $3.827 billion in advertising revenue in the second quarter), such frequent (and longer) outages do not bode well for this Zacks Rank #3 (Hold) company.

The social media giant not only needs to work on minimizing such instances but also strive to get the site up and working in quick time.

Better-ranked stocks in the same space include Google Inc. GOOGL and Synacor, Inc. SYNC , both having a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FACEBOOK INC-A (FB): Free Stock Analysis Report

SYNACOR INC (SYNC): Free Stock Analysis Report

TWITTER INC (TWTR): Free Stock Analysis Report

GOOGLE INC-CL A (GOOGL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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