TODAY'S PAPER
38° Good Evening
38° Good Evening
BusinessTechnology

Limited Run pulls Facebook ads over bots

Facebook, which went public in New York on

Facebook, which went public in New York on May 18 trading at $42, closed at $21.71 Tuesday, a day after Limited Run, based in Manorville, announced it was deleting its Facebook page. (May 18, 2012) Credit: Getty Images

A tiny Long Island company's decision to delete its Facebook page has unexpectedly created an uproar among tech bloggers and investors questioning the business model of the giant social networking company.

Limited Run, a Manorville start-up that provides a Web platform for musicians to sell their music and merchandise, wrote a post Monday on its Facebook page and blog explaining that it had decided to stop using the social network for advertising. It also said it would delete its Facebook page after a lackluster customer service experience.

What caught broader attention was that Limited Run said it discovered 80 percent of the "clicks" from its ads on Facebook to its website were from Web robots, or "bots" -- computer software automated to click on Internet ads -- and not from real people who might become customers. Limited Run was paying Facebook for every click on its ad.

Tom Mango, the co-founder of Limited Run and a Smithtown native, said in an email Tuesday, "We have no idea who the bots are run by and don't think Facebook has anything to do with it."

A Facebook spokeswoman said the company is currently investigating Limited Run's claims.

Many tech blogs jumped on Limited Run's comments as a sign of trouble for Facebook. Tech blog Mashable, for instance, wrote, "The notoriety by the incident may be the small business equivalent to General Motors's decision to pull its ads from Facebook in May." General Motors Co. withdrew its advertising right before Facebook went public.

Brian Wieser, a stock analyst with Pivotal Research Group, said Limited Run's post may have contributed to a decline in Facebook's stock Tuesday, when it touched its lowest level since it began trading in May at $42.05. The stock closed at $21.71, down more than 6 percent.

Mango, who said he received numerous calls from the media after writing his post, called the reaction in the blogosphere overblown.

His decision to leave Facebook "boiled down to . . . bad customer support for us," he said, "and everything got blown out of proportion by everybody else."

Mango said he is worried the publicity over his company's withdrawal from Facebook might overshadow its business, which caters to a niche audience of independent musicians.

"You're going to search for Limited Run on Google, and our website probably won't show up because of this," he said. "Hopefully things will just quiet down, we'll delete our Facebook page as planned . . . and we won't have to deal with this any longer."

More news