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MarketWatch First Take

Is GM flooring it back to Facebook?

NEW YORK (MarketWatch) -- General Motors Co., two months after publicly bolting from Facebook's advertising ranks, is poised to return to the social-media dynamo's fold.

Just days before Facebook's initial public offering, GM said it would stop advertising on Facebook, that the paid ads had "little impact on consumers." Read "Facebook's GM loss may weigh on IPO."

Facebook stockholders can feel optimistic for the first time, perhaps, since the star-crossed IPO, when there were trading glitches at the Nasdaq, followed by a disappointing stock-market performance.

With GM now apparently willing to talk about returning to Facebook, the move might encourage additional prestigious companies to want to advertise on Facebook.

The Wall Street Journal notes that GM (GM) GM Chief Executive Daniel Akerson and Facebook (FB) Chief Operating Officer Sheryl Sandberg are attempting to make that happen.

For Facebook, this would represent a huge public-relations victory, following a few months of desultory news. When GM fled, pundits began to question whether Facebook could attract and retain big-ticket advertisers, like the auto maker. As the Journal pointed out, GM's departure resounded as "an embarrassing blow" to Facebook's image.

Then, when Facebook's ballyhooed initial public offering on May 18 became a public spectacle, the criticism of the company intensified.

It would be something if Facebook's management began to prove its detractors wrong -- and if its heretofore lackluster stock fortunes began to pick up momentum.

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