Facebook Sell-Off "Surprised" This Analyst

Did investors overreact when they decided to

Facebook

this morning? Based on the afternoon gains (the stock is still down less than one percent but recovered from its six percent drop this morning), it would seem that the answer is yes.

Jan Dawson, Ovum's Chief Telecoms Analyst, was particularly surprised by the investor reaction. "It's kind of interesting because the big challenge around the IPO was the mobile picture, which really became clearer as the IPO became very close and then happened," he told Benzinga. "Over the last several quarters they've gone from no revenue from mobile advertising to 23 percent of their advertising revenue from mobile. That's really good progress in that short space of time." Dawson said that he has yet to see a "huge outcry or backlash from users saying, 'Oh, they're advertising on my mobile app, I don't want that.'" "They seem to have done it in a fairly careful way where it's striking a good balance between pleasing users and pleasing advertisers and making money at the same time," he said. "I think they've handled that quite well. They still need to think about where future growth is going to come from because the base is going to start slowing. There just aren't that many more users they can go after and expect to make the same money through advertising, so they need to think what [to do] next." On that note, Dawson points to the Social Graph. "The whole Social Graph thing in search is one good opportunity, but they probably need several more like that to really plan for the future," he said. "For now I think their performance over the last couple quarters has actually been quite good. I am a bit surprised at the sell-off. They hit the big items, they hit expectations for Wall Street -- what more can you do?"