"Look, if they 'MySpace' the company and over-advertise and they lose their users, stock may go up near term, but the stock will be of less value," Mahaney said.
"My concern is the stock ticker — Wall Street probably isn't going to be that patient with it. So everybody is going to be jumping the gun, looking for monetization bump ups that we don't think occur in the next quarter or two. So that's why we have a hold on this," he said.
It's not just Wall Street that may be disappointed with Facebook's steady move into advertising.
Marketers have also expressed dismay with Facebook's platform for advertising, Mahaney said.
Advertisers are not as satisfied with the data-tracking tools Facebook offers as they are with the tools other ad platforms provide, he said.
"Everybody is into Facebook as an experimental ad buy; It's not a committed ad buy yet," Mahaney said. "There is a sense of arrogance that comes out of Facebook."
It is also unclear how users will respond to mobile ads, which are just starting to be implemented, Mahaney said. Although mobile ads are needed to generate revenue, the company is taking caution with implementing these, so they don't scare off the users.
"They are going to be very careful about ramping up the monetization of the experience," he said. "They have the MySpace lesson burned into their brains. They are doing the right thing here, very slowly, incrementally building up the monetization."