What’s Behind Facebook’s Slide?

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Facebook shares are down more than 20 percent since hitting a six-month high of $32.51 on Jan. 28. Just two days later, the company reported earnings that beat on the top and bottom line. So what's behind the slide?

It's largely due to growing concerns that Facebook ads aren't working well, concerns spearheaded by BTIG analyst Rich Greenfield. He says Facebook has shifted from truly social ads to more "spammy" ones. "It's concerning that they'd be struggling to grow revenues fast enough that they use ads that don't align with their original mission," he said.

Greenfield says "they're proceeding down a path that is challenged to grow advertising," and points to the fact that ComScore reported that page views declined in February. Last week, Greenfield posted a report titled "Facebook launches 'Dark Posts'—Have Zuckerberg and Sandberg gone too Far?"

(Read More: Why Facebook Is Still the Future of Social Media)

Greenfield says the term "Dark Posts" refers to the fact that "news feed ads (sponsored or suggested) can now be standalone ads that do not tie back to the brand's Facebook page. So while Walmart and many other brands like to use dogs, cats and babies to draw attention to their Facebook ads, they could only use them so often as it would look out of place on that brand's Facebook page. Now brands can dream up whatever creative ideas they can think of to drive you to click 'Like' on their brand."

Another challenge: expectations. "Wall Street expectations are very aggressive for 2014," says Greenfield. "We have mobile revenues up sequentially from Q4 to Q1." But the problem Greenfield says, is that seasonality usually means that ad revenue declines after the holiday season."

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But Wedbush's Michael Pachter says he thinks Greenfield is "completely wrong."

"Greenfield seems to think nobody uses Facebook anymore, and that advertisers are unhappy with the news feed; everyone I talk to has the opposite view," Pachter said.

And Facebook has been working on a number of initiatives to drive revenue higher. A new news feed layout is designed to be more engaging, and keep users hooked longer. And the redesign also hints at the potential for higher-value video ads. While the new "graph search" hasn't yielded a tangible impact on ads yet, the potential, based on Google's massive search ad revenue, is huge.

(Read More: In News Feed Revamp, Facebook Creates 'Personalized Newspaper')

Plus, Facebook is working to make its ads more effective by working with companies that collect data on users, to better target ads within the site. With better-targeted ads should come better results, which Facebook is also investing in tracking.

We'll see how all these investments pay off when the company announces its next quarterly results, expected in about a month.

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin