As Facebook's stock continues its slump, now trading even lower than yesterday's low, the Internet has reached a consensus on why the IPO of the year isn't performing: Advertising. It's how Facebook makes its dollars. And, it has made a lot of dollars this way. But it's not clear Facebook's very good at it, or will get good enough at it to justify a $38 per share price. Hence the investor worry.

  • The Internet ad model is broken and Facebook is only making it worse, writes Michael Wolff in Technology Review. "As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else," he writes.
  • Facebook's both more expensive and less valuable than Google, which already won the Internet ad game, explains Smart Money's Jack Hough. "Google has found a way to multiply its revenues 17 times since its initial stock offering, to $40 billion. If Facebook can do likewise, investors should expect its stock to do half as well, considering that it’s starting at twice the price. But it may be unrealistic to expect that kind of revenue growth from Facebook," he says.
  • Investors got jittery after Reuters reported that underwriters cut their revenue forecasts for Facebook based on mobile, where it doesn't know how to advertise, explains both The Wall Street Journal and Reuters. "It said the cut came after Facebook released an updated prospectus ahead of the share sale that cautioned about revenue-growth challenges presented by a shift to mobile devices," explains WSJ.
  • Even before the price was set, underwriters questioned Faceboook's advertising model, explain DealBook's Michael J. De La Merced, Evelyn Rusli and Susanne Craig. "Some of the firms resisted, arguing that the company’s fundamentals did not justify a higher valuation, according to people with knowledge of the talks," they explain, in a walk through of how Morgan Stanley lost at the Facebook IPO. (This is another money quote: “Investors were expecting easy money on this one," David J. Abella, a portfolio manager at Rochdale Investment Management told DealBook.)
  • The smart investors are getting out now because they know Facebook's ad model isn't sustainable, explains CBS MoneyWatch's Constantine von Hoffman. "Remember what Joe Kennedy said before crash of 1929: 'You know it's time to sell when shoeshine boys give you stock tips.'" he ends his piece.

Still, no one is predicting Facebook will fall into oblivion. Facebook's still rolling in revenues which it can use to invest and improve its business explains Business Insider's Nicholas Carlson. And, Mark Zuckerberg's still a billionaire 16 times over, per The Wall Street Journal's wealth-o-meter.