the file is not a icon (ico) and it needs to be otherwise it will not display in every browsers address bar, which is the objective.. the favorite icon requires an absolute path which is why the URL is required... failure to follow this can create issues with specific browsers such as Safari.
You can use a jpeg for this however it will not work correctly in all browsers which negates the point of doing such... currently the file also has a double extension favicon.ico.jpg this is common practice for viruses which use this technique to hide executable files from the average user as such some combined antiviral / firewall applications may freak out as the file currently stands as it looks suspect.

make it an ico... fix the coding and all will be exceptionally happy