Just days before its highly-anticipated initial public offering, social networking giant Facebook has received a very public slap in the face from car giant General Motors: it has told Facebook that it will no longer advertise with it because the ads just don't work.

The loss of $10m in ad revenue is not likely to dent Facebook's market value, which is on course to sale past the $100bn mark when it floats. Last year Facebook made $3.7bn in revenue.

But the public rebuke over the effectiveness of advertising on the social network will undoubtedly sting.

According to the Wall Street Journal, which first reported GM's shift in advertising strategy, the car giant spends around $40m each year on Facebook – three-quarters going on social content and $10m on advertising.

The implication is clear: Facebook's a great avenue for businesses to connect with their customers, but spending money on adverts is simply over-egging it.

And GM is not alone in questioning the value of Facebook advertising.

According to research by online ad analysts WordStream, Facebook ads generate far fewer click-throughs than those placed with arch-rival Google. WordStream claimed the average click-through rate on Google display ads is 0.4 per cent; with Facebook it's just 0.05 per cent.

Such measures matter little when Facebook can generate rampant demand for its stock ahead of its IPO. But as a public company, it will be beholden to shareholders that demand revenues grow – so expect to see Facebook double down on its ad offerings in the very near future.

The gossip around Facebook's impending initial public offering (IPO) that's expected to take place in the coming weeks, or even days, received another juicy bit of intrigue when one of the firm's founders, Eduardo Saverin, renounced his US citizenship.

The move was immediately cited as a tax dodge by critics, as by taking citizenship of Singapore he is reported to save some $600m in tax on the cool $4bn he is expected to make when the firm's stock hits the markets.

According to the BBC, a spokesperson for Saverin explained the decision by saying he, "found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time".

While it makes good fiscal sense for Saverin, there is something slightly unwholesome about the situation, as Facebook is cited as one of the shining lights in Silicon Valley's ability to conjure up new, world-changing businesses that make the US as a world-leading tech hub.

For one of its co-creators to give up his relationship with this country for the purposes of saving a chunk of change (admittedly a rather large chunk), seems a touch rash, but as Saverin was actually born in Brazil, perhaps he doesn't have such strong ties to the nation.

It comes just a few days after founder-in-chief Mark Zuckerberg was slated for wearing a hoodie and sandals to a meeting with investors.

However, with both Zuckerberg and Saverin now expected to rake in billions, neither probably care much what the critics have to say about their living locations or sartorial style.

As any ardent tweeter knows, you can pack a lot into 140 characters. Enough indeed to land you in jail for nearly two months, as Swansea University student Liam Stacey has found to his cost. Those that think the micro-blogging platform provides any semblance of anonymity should sit up and take note.

Stacey was found guilty of posting racially offensive comments on the site, relating to Bolton Wanderers footballer Fabrice Muamba, after he collapsed on the pitch during a recent FA Cup match with Spurs.

Police were knocking on Stacey's door to question him about the comments within days.

While there's been near-universal revulsion at Stacey's comments, the 56-day sentence imposed underscores the hard line taken by the authorities over what gets posted on social media.

Earlier this week, a cross-party committee of MPs published their report into privacy and injunctions, in the wake of numerous online breaches of court orders, often by people posting under a pseudonym on Twitter.

As the MPs noted, Twitter will readily unmask its users and hand over all account information when presented with a court order.

Stacey isn't, of course, the only person to appear in court because of comments made on social media.

Last year, two men, Jordan Blackshaw and Perry Sutcliffe-Keenan, were jailed for four years for inciting riots on Facebook.

And Paul Chambers' case has become something of a cause célèbre, after his tweet about blowing up Robin Hood airport landed him with a hefty fine.

Anyone viewing Twitter as just a repository for throwaway comments should think again.  

While the world worked itself into a frenzy over Facebook's IPO earlier this month, the other social media giant Twitter has said it will postpone plans to go public for years because it is not ready to disclose its earnings to the market, according to reports.

In an email obtained by CNN, Twitter chief executive Dick Costolo told staff last year that the firm will not be taking the same path as Facebook in making an initial public offering (IPO) anytime soon.

"We don't want to be public until we have very predictable quarterly earnings growth," Costolo wrote in his August email, according to CNN.

"We're not ready to be a public company for a couple years."

For the last year, Twitter shareholders have been banned from selling more than 20 per cent of their shares.

The reason for this is that if companies have more than 500 shareholders owning one class of equity shares the Securities and Exchange Commission (SEC) mandates the business to disclose financial results.

Twitter told V3 it could not comment on the email.

The firm has been discussing possibilities of an IPO route to revenue growth since 2009.

In related news French president Nicholas Sarkozy has joined Twitter. The president has not always shown a liking for emerging technologies and the social web, particularly when the new technologies come into conflict with traditional media establishments.

It remains to be seen if he proves as sensational as some of the other recent converts to the micro-blogging service, most notably Rupert Murdoch who has already hit out at Google on the service.

One of the most interesting things about Facebook filing its $5bn initial public offering (IPO) is that it finally provides some hard evidence into the company's success and operating strategies, having for so long been a private company with closed books.

Mostly notably, the firm is already making some strong returns on its advertising model, with revenues up to $3.7bn for 2011, an increase of $1.7bn from 2010, showing the company's advertising-led model is paying off.

However, it is not just advertising that is driving this income, with the firm revealing in the filing that Zynga was responsible for 12 per cent of this income, as Facebook takes a cut of any purchases made by users in the games that run on the site.

Away from the financial figures, the filing with the Securities and Exchange Commission (SEC), also highlights some of the ways in which the company is setting itself up to deal with having to appease Joe Public once they get their greasy mitts on shares in the firm.

The most interesting of the caveats Facebook has placed within its IPO relates Mark Zuckerberg's right to appoint the company's successor in the event of his death.

"In the event that Mr. Zuckerberg controls our company at the time of his death, control may be transferred to a person or entity that he designates as his successor," the filing notes.

However, Zuckerberg clearly has no intention of handing control over any time soon as he's made sure that the share structure of the company works in his favour.

Each share of the 28.4 per cent stake he controls in the firm has a 10 times greater power than normal shares on any issues shareholders vote on, ensuring he retains overall control of the firm.

"[This] provides Zuckerberg with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares, [...] including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets," it reads.

Zuckerberg has also committed to only draw a salary of $1 a year from 1 January, 2013, similar to Steve Jobs during his time at Apple. He probably expects to eek out a living via bonus schemes and share grants.

The firm will also likely be forced to start providing regular updates on the number of active users on the site, which has now been revealed as 845 million, so it may even be the case it can tout one billion members in the run up the firm going public in May.

No doubt that will send already rabid investors into a full-blown frenzy. All this from its inception in a dorm room in Harvard. Amazing.

ORLANDO: With IBM beating the drum on the use of social tools and collaborative software, its chief information officer Jeanette Horan, outlined the firm's own work in these areas, to show it practices what it preaches.

With almost half a million full-time employees (currently around 450,000) IBM has a huge workforce using a vast array of tools, both internally and externally and the figures she revealed are truly astounding:

•    On average 360,000 staff use the firm’s instant messaging platform every day.
•    This generates a staggering 50 million instant messages per day.
•    There are 198,000 members of staff on Facebook.
•    A much smaller 20,000 are on Twitter.
•    LinkedIn Is the most popular platform, though, with 281,000 users.
•    20,000 members of staff run their own internal blog on the firm’s Connections tool.

She also revealed its willingness to shake things up by explaining it runs a reverse-mentoring system in the company where some of the youngest new staff members teach its most senior executives how to use the latest social tools.

However, one area the firm admitted it is still addressing is the growing issue of what should happen to employees' Twitter accounts after they leave the company.
 
Carol Sormilic, vice president global workforce and web processes, explained to V3 that it is an area the firm is currently debating internally, but has yet to reach an answer.

One area where the firm is up and running, though, is letting staff bring their own devices to work after the end of a two-year pilot that involved feedback from 20,000 members of staff, which actually equates to just five per cent of its workforce.

This led to the creation of a set of policies that include an enforced eight-digit password for each device to access the corporate network and Horan revealed that she herself uses her own personal BlackBerry phone as her work device.

On the issue of cloud computing, Horan explained that IBM operates six datacentres to help it run a private cloud computing network as the size of the firm makes this a viable return on investment.

“We have the scale to be able to see the benefits of managing the cloud behind the firewall,” she added.

As well as a fascinating insight into the day-to-day IT demands of a firm the size of IBM, its willingness to embrace new trends and give staff the power to take advantage of new tools may give IT leaders in other, smaller, firms the courage to go forward with their own plans in these areas.

Google executive chairman Eric Schmidt argued at the Le Web conference on Wednesday that Silicon Valley needs to have more competitors on the world stage.

Schmidt said he considered a number of European cities to be eligible rivals for the California tech hub. Schmidt named Paris specifically, although this may well have have been because Le Web is taking place in the French capital.

"Today's entrepreneurs tend to break out young, they are risk taking, they are less family oriented, and these kinds of people prefer cities," said Schmidt.

"Also the diversity that cities offer tends to produce stronger organisations."

Schmidt said the role of governments in creating the next Silicon Valley should be to ensure all citizens have access to fixed and wireless broadband. "Then the government should let the citizens do everything else," he said.

Schmidt also told entrepreneurs attending the event that he thinks his country's authorities are "idiots" for having such strict visa regulations that deprives the US of innovative ideas.

"You can't move to the US because we are idiots and we won't give you a visa," said Schmidt.

Facebook's European managing director, Joanna Shields, agreed with Schmidt that the 'next Silicon Valley' will be in a city.

"City clusters are really where innovation is starting to happen. Europe, Paris, London, Berlin are really going to give Silicon Valley a run for its money," she said.

All of which is great news for London's Tech City, which David Cameron and the coalition government have really being pushing as a centre for technology entrepreneurs.

With investment from Google, Yammer, Huddle and a host of other technology firms, the area has already tripled in size to feature over 600 companies now in just its first full year.

However, there have been concerns from some that the area is running low on office space, with Old Street and Shoreditch particularly swamped, while areas to the north and east, towards Stratford and the Olympic Park, remain relatively untouched.

Ever since the riots that swept the UK in August there's been much debate and hand-wringing over what should be done with social media sites during times of unrest, with the government even threatening to shut down sites like Twitter.

Thankfully, Thersea May and co. seem to have come to their senses and said they will not be seeking additional powers to block sites. There was a timely reminder that these services can benefit law enforcement agencies on Thursday when it was revealed that over 600 police officers are now on Twitter.

Speaking at a Westminster Forum event, Paul Reilly, a lecturer in media and communications at the University of Leicester, noted that since the riots the number of police officers on Twitter had grown to 632.

"Every territorial force now has a Twitter feed as part of steps being taken to use this tool to engage and provide accurate information and stop rumours circulating," he added.

"Police in Northern Ireland have been particularly proactive in the use of social media and received praise for this and other forces are using these tools more effectively now but there has been a degree of caution among some too."

He added that this number had grown significantly since the riots as more officers out on the streets look for ways to engage with their community.

Furthermore, not only does Twitter offer engagement but it also offers a wealth of information that police forces can access, as Justin Crump, the chief executive of security intelligence consultancy firm Sibylline, explained.

"Social media is open source intelligence on steroids. It moves at a hell of a pace and can be very biased and you have to be very disciplined to deal with it but if you integrate people, processes and technology you can gain benefits," he said.

Indeed, V3 spoke with South Yorkshire Police in October who are using Twitter to increase engagement with the community and track potential disturbances, as police across the land prove that shutting down social media sites would be a disastrous decision.