By Ben Klayman

(Reuters) – General Motors Co will not advertise in next year’s Super Bowl because it is too expensive, the top marketing executive for the U.S. automaker said three days after the company said it was dropping paid ads on Facebook Inc.

The 2013 Super Bowl will be broadcast by CBS Corp, which is selling 30-second ads for as much as $4 million.

Spots on NBC’s broadcast of this year’s National Football League championship game, the most heavily watched annual event on U.S. television, cost about $3.5 million per 30-second spot. NBC is majority-owned by Comcast Corp.

“We understand the reach the Super Bowl provides, but with the significant increase in price we simply can’t justify the expense,” GM global marketing chief Joel Ewanick said in a statement.

GM, which ran four ads during this year’s Super Bowl broadcast, also chose not to advertise during the Super Bowl in 2009, just ahead of its June filing for bankruptcy protection.

CBS spokesman Dana McClintock declined to comment.

DETROIT/NEW YORK, May 17 (Reuters) – Facebook may only have itself to blame for why General Motors rained on its IPO parade this week.

GM announced the decision to drop Facebook paid ads on Tuesday in what was the first highly visible crack in Facebook’s strategy and illustrated doubts about its perceived advantage over traditional media.

GM’s decision followed Facebook officials’ failure to convince top marketing executives at the U.S. automaker of the benefits of Facebook’s paid ads at a meeting that took place in the past few weeks, people familiar with the meeting said on Thursday.

That was after Facebook officials focused more on touting the social networking website’s free pages, the sources said.

“It kind of backfires on them in a funny way,” said one of the sources, who asked not to be identified, of the emphasis on the free pages.

News of the meeting, which sources said took place at Facebook’s Menlo Park, California, headquarters, comes on the eve of its much-anticipated market debut. The company on Thursday priced its initial public offering at the top of its target range and is set to raise up to $18.4 billion.

Facebook and GM declined to comment about the meeting or their relationship.

DETROIT (Reuters) – General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public.

A source familiar with the automaker’s plans said GM’s marketing executives decided Facebook’s ads had little impact on consumers.

While GM’s decision could be an exception in the advertising world, it marked the first highly visible crack in the Facebook strategy, said Brian Wieser, Internet and media analyst at Pivotal Research Group.

“This does highlight what we are arguing is the riskiness of the overall Facebook business model,” he said. “It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it’s not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle.”

Facebook Inc, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, is expected to start trading on the Nasdaq on Friday. The world’s No. 1 social networking site raised its IPO price range on Tuesday, potentially giving the company a valuation of more than $100 billion.

GM said it will still have Facebook pages, which cost nothing to create, to market its vehicles. GM pays no fee to Facebook for its pages, which allow the automaker to reach consumers directly.

GM said it regularly reviews how it spends its marketing budget and adjusts its approach as needed.

By Ben Klayman

(Reuters) – Lithium-ion battery maker A123 Systems Inc (AONE.O: Quote, Profile, Research, Stock Buzz) expects production capacity to be constrained over the next several quarters as it recovers from a battery recall but said it has corrected the cause of the defect and that demand remains strong, sending shares up 12 percent.

A123 also said on Tuesday it had not lost any customers due to the defective batteries.

“We felt after the last (earnings) call that we were looking at a very strong year and that campaign has diverted resources that otherwise would have been deployed on many of our growth activities,” A123 Chief Executive David Vieau told analysts on a conference call, referring to the recall.

Last week, A123 warned of a huge first-quarter loss due to the recall and said much of the production that would have generated revenue this year will be diverted to replace the possibly defective cells.

The company, which received a $249 million grant from the Obama administration as part of a program to develop advanced batteries, said the cost of recalling the battery packs would be $66.8 million.

A123, which developed as a start-up at the Massachusetts Institute of Technology, said on Tuesday it was restarting production in a controlled manner at the Livonia, Michigan, facility.