He also said Facebook is pushing hard on mobile, will dive into search at some point, and no, they are not building a phone. Seriously, he can’t emphasize it enough — there will be no Facebook phone.
“The performance of the stock has obviously been disappointing,” he said during an on-stage interview at the TechCrunch Disrupt conference in San Francisco late Tuesday afternoon. “How well we do with mobile is a big part of it… A lot of stuff has changed. Six months ago we hadn’t launched our new apps, Apple hadn’t announced their new iOS integration. People shouldn’t underestimate how fundamentally good mobile is for us.”
Facebook’s initial public offering this past May largely has been a big disappointment to investors and other players in the social networking world.
In the months running up to the company’s IPO, there had been great expectations, with analysts and investors predicting that Facebook’s stock would take off, soaring from its opening price of $38 a share to $50, $60 or even as high as $90.
However, that hasn’t happened. Instead, the company’s IPO has been hammered, sinking instead of growing. On Tuesday, the company’s stock closed the day at $19.43.
That means the disappointing results have stood out in even greater contrast to the height of its pre-IPO expectations.
In recent weeks, talk turned to whether a seasoned business person could better lead Facebook, leaving 28-year-old Zuckerberg, with his gray T-shirts and hoodies, to focus on the technology instead of running a major business venture.
Appearing on stage today, though, Zuckerberg came across as a calm man who has a plan for where to take his company. And his vision is largely focused right now on mobile.
And that’s a good thing since there was quite a bit of pre-IPO doubt about Facebook’s readiness to take on the burgeoning mobile market. In its pre-IPO documentation to the U.S. Securities and Exchange Commission (SEC), Facebook even listed mobile as one of its risk factors.
That’s not how Zuckerberg sees it today.
“With the person using Facebook on mobile, there’s more engagement and they’re spending more time. Mobile users are more likely to be daily active users,” he said. “Before we had a mobile core team… Now we are a mobile company.”
Dan Olds, an analyst with The Gabriel Consulting Group, said Zuckerberg came across as being clear about the company’s challenges and being in control of figuring out one of them — mobile.
“It sounds to me like he was simply being straightforward about his thoughts and Facebook plans,” said Olds. “Although I don’t think that was what investors or Wall Street necessarily wanted to hear. I think they would want to hear him take responsibility or maybe even apologize for the huge losses from Facebook stock since the IPO.”
However, aside from Zuckerberg falling on his sword, Olds said investors and analysts want to hear what he’s doing to move the company forward. While he talked a good talk about mobile, Olds said he’s waiting to see how it all plays out.
“He’s right that much of their future is in mobile, but the proof of how well they’re doing in mobile today will be in the pudding that we’ll see in their next earnings report,” he added.
For now, Facebook is dealing with the fallout from its lackluster IPO.
When asked if the slumping stock price was affecting employee retention and morale, Zuckerberg, who was wearing his typical T-shirt, jeans and sneakers, responded, “Well, it doesn’t help.”
However, he also went on to say that this isn’t the first time people have bet against the company and it probably won’t be the last.
“This isn’t the first up and down that Facebook has ever had,” Zuckerberng added. “We go in waves. At times people think every thing we’re doing is awesome and there are times when people are really pessimistic. I’d rather be in this cycle where people underestimate us. It gives us latitude to go out and make some big bets.”
However, Zuckerberg was very clear that one of those big bets will not be to build a smartphone.
The CEO was repeatedly asked about the ongoing rumors that the company is building a phone and every time, he pushed it aside. “That’s always been the wrong strategy for us,” he said. “We’ll have 950 million users soon. Let’s say we built a phone, theoretically — we’re not — but we get 10 million people to use it. That doesn’t move the needle for us… The phone just doesn’t make any sense.”
What does Zuckerberg see as a good strategy down the road?
That’s right. When asked about his interest in getting into search and how much Google’s entrance into the world of social networking annoyed him, Zuckerberg didn’t pull many punches. “We do on the order of a billion queries a day now and we’re not even trying,” he quipped. “I think there’s a lot of opportunity there and we’ll have to someday go after that.”
Zuckerberg said he didn’t have anything specific to announce about search right now but it would be an obvious thing for the company to do I the future.