On Facebook's conference call with analysts today, CEO Mark Zuckerberg and his top lieutenants repeatedly stressed that they plan to take their time rolling out more ads on mobile devices to avoid angering users.
And in doing so, they are angering Wall Street.
After Facebook posted unspectacular results for its second quarter -- its first report as a public company -- management offered few details about what to expect in coming months.
The absence of specificity came as a disappointment to Facebook watchers. Citigroup's Mark Mahaney said that while the results shouldn't be viewed either "as dramatically good or bad," he said that key questions remained -- in particular, the future of Facebook's mobile monetization as well as the future of Facebook's user engagement.
But the little that Facebook did say proved unsettling. While Facebook continues to grow its user base and average revenue per user (ARPU), most of that growth is outside the U.S., where the company makes far less money on each user than it does in North America. Another worry for investors: COO David Ebersman said that ad impressions are down overall, largely because more users are accessing Facebook on mobile devices.
The result was brutal: Facebook stock, which fell more than 8 percent in regular trading, skidded another 11 percent after hours, leaving a share of Facebook at just below $24 a share. That's a roughly 37 percent drop from the $38 dollars a share offering price set for its May IPO.
Such is the bind that the newly-public Facebook has put itself in. Investors -- burned by the company's ugly IPO and subsequent lousy stock performance -- wanted a clear road map pointing where Facebook is going as it tries to squeeze more money out of its 955 million users.
Not surprisingly, Zuckerberg wasn't playing along. For Facebook watchers, he offered more evidence that this was a CEO marching to his own drummer, more interested in product than on pleasing the short-term focus of myriad Wall Street suits.
"I don't have any more plans that I'm going to share with you about our product road map," the 28-year-old CEO and founder said during the call.
What followed was almost kabuki-like. Again and again, analysts wanted to know more about Facebook's efforts making money from mobile. The answer, given in different ways from Zuckerberg -- as well as COO Sheryl Sandberg and Ebersman -- was that Facebook was making progress but that it's being methodical and taking its time to make sure it gets it right.
"We're not TV. We're not search. We're a new medium," Sandberg said at one point, a colorful quote that may not mollify the skeptics who just want to see stronger growth.
In the near-term, Facebook is counting on the power of social ads on mobile phones, called Sponsored Stories. These are ads that show up on News Feeds of a brand's fans and their friends.
Sponsored Stories in the News Feed are the "cornerstone of our mobile strategy," said Sandberg, who pointed out that they're also the most relevant for advertisers.
And on paper, at least, the potential is huge. Facebook disclosed that around 543 million people use its mobile services and that those folks are 20 percent more likely than desktop users to be active consumers of various services on the site. What's more, there is evidence that social ads are more effective than desktop ads, but, as the execs pointed out, it is still early. Facebook only began letting advertisers buy mobile-only sponsored stories in June.
Here was an area where Sandberg did share some numbers not in the press release. By the end of June, she said, sponsored stories in News Feeds were generating more than $1 million a day, with half of that coming from mobile. But while she said that Facebook planned a bigger push behind sponsored stories in 2012, nobody should expect an overnight success.
"We're still in the early days of building our monetization engine," she said.
With about $10.2 billion in its vaults, Facebook can afford to take the long view. Even as the pressure steps up in coming months.