As Facebook Stock Nears $18, Its Focus on Music Will Suffer

Facebook shares dove under $19 and were trading down 4.86% to $18.17 Friday afternoon after slashed price targets and fresh revenue concerns.

Citing "challenged" media spending and an inflow of additional shares from lock-up expirations, BMO Capital Markets cut its price target to $15 from $25 on Friday. BofA Merrill Lynch cut its price target to $23 from $35.

What this means for Billboard readers is music probably will not figure prominently, or even much, into the company's plans in the coming months and years. At $18.35, Facebook is less than half its initial offering price of $38 (which itself was too high and led to quite a fiasco for the company). It could drop further as previously locked up shares are sold on the public market. It could drop even further if the company fails to adequate ramp up its mobile product and performance.

Flash back to Facebook's annual f8 developer conference. Music was a focal point of the company's debut of Open Graph, Facebook's social fabric that Internet radio services, subscription services and ticketing companies can use to improve their own services. Spotify CEO Daniel Ek took the stage with Facebook CEO Mark Zuckerberg -- the two met through Spotify investor Sean Parker -- to talk about the tight integration between the two products. After f8, one was left with the impression that music was an indelible part of Facebook's future.

But music's star has faded at Facebook because two things have happened since that f8 conference: the introduction of the Timeline format in December and the company's initial public stock offering in May.

Timeline has eroded the value of Facebook for musicians, turning a potential one-stop shop into just another place to visit. Witness BandPage, which went from building social apps specifically for Facebook to building tools that depend less on Facebook. Witness MTV, which just launched in public beta its Artist.MTV initiative that gives any artist a media-filled page at MTV.com with Topspin-powered ecommerce tools. If Facebook -- and MySpace -- won't be the de facto online home for musicians, MTV will give it a shot.

The company's initial public stock offering in May indirectly impacts the music business by diverting focus and resources. The further Facebook's stock falls, the more irate Facebook investors and analysts become, the greater the chances the company will experience changes in leadership, kill old projects and focus on a small set of fundamentals that do not include music. Improving its mobile platform and monetizing its growing mobile audience are at the top of the list.

Beyond music video, which continues to be popular at Facebook, music has had few recent successes and has failed to live up to expectations. Facebook Music, the tab that allows a user to see friends' music activity on various apps and services, has been a non-event. And no evidence has appeared the "listen" button installed on artist home pages has moved the needle. Expect more of the same as Facebook sorts out its larger problems.