When Facebook decided to float on the stock market in May, it was heralded as the most anticipated stock offering since Silicon Valley; however, things have not quite gone according to plan.
Shares initially priced at $38 and bought for as much as $45 are now sitting below the $20 mark and have been for the past month. Facebook’s foray into the stock market was the last time company CEO Mark Zuckerberg had been seen in public—until Tuesday, September 11. Zuckerberg took to the stage at the TechCrunch Disrupt conference in San Francisco for a half-hour interview with TechCrunch founder Michael Arrington. As always with Zuckerberg, the interview revealed some interesting things about the future strategy of social networks.
Addressing the stock market issue, Zuckerberg admitted that “the stock performance has obviously been disappointing.” However, he did not seem overly stressed about the tanking price and public scrutiny affecting company morale, stating, “I think there are a few things that are important to keep in mind. Facebook has not been an uncontroversial company in the past.”
Mobile
Around half of Facebook’s 950 million members now access the site on mobile devices, so it is only natural that Zuckerberg’s primary focus is on this area. “We think we’ll make a lot more money than on the desktop,” the CEO said during the interview. According to eMarketer, who recently published a report about US mobile ad revenues, Facebook earned $72.1 million (£45.6 million) this year in revenues. That is a modest figure compared to rival Twitter which earned $129.7 million (£81.4 million), but eMarketer forecasters suggest that the tables will turn next year when Facebook grabs more than $385 million (£241 million) and then increases revenues in 2014 to an estimated $629.4 million (£394.7 million); around $185 million more that the estimates for Twitter.
If those figures prove to be correct, by 2014, Facebook will be second only to Google in mobile advertising revenue—although still significantly behind the search provider.
To make the amount of money in revenues that eMarketer suggests, Facebook is going to need to improve its mobile apps, which are slow and buggy, to say the least. A negative response to apps is something that Zuckerberg was aware of, and they called their use of HTML 5 open network “one of the biggest mistakes, if not the biggest, strategic mistake we’ve made”, adding, “But we’re coming out of it now.”
Facebook recently switched to Apple’s iOS platform, and new apps have been made available for iPhone and iPad—both of which are far better than the previous generic apps. Apparently, work is also underway for new apps on Android, setting Facebook up perfectly for a full assault on mobiles and a likely more stable future on the stock market.
