Zuckerberg on Facebook's post-IPO woes
SAN FRANCISCO -- An energetic Mark Zuckerberg addressed a rapt crowd at the TechCrunch Disrupt conference here. The 28-year-old CEO wore his traditional gray T-shirt and sat on the edge of his chair as TechCrunch co-founder and angel investor Michael Arrington fired questions at him, starting with the botched IPO. Zuckerberg powered his way through the conversation, talking fast and confidently about the opportunities that lie ahead for Facebook and its investors.
While the hall was packed with techies and Zuckerberg had the hometown advantage, he clearly knew that he was talking to Wall Street -- and, by default, all those investors out there who took a bet on Zuckerberg after the May IPO and have watched their investments shrink. The stock is about half its $38 IPO price, but after a strong showing by Zuckerberg in his first public interview since the Q2 earnings call, there is a sign that Wall Street sees some promise. In after-hours trading, the stock was up more than 3 percent.
"The performance of the stock has obviously been disappointing," Zuckerberg said. He went on: "...the commitment we've made is to make the world more open and connected...for the long term. The next three to five years is really going to be how well we do with mobile."
That's right. Zuckerberg led the interview right to the key issue that Wall Street most often cites as Facebook's key problem: mobile. When Zuckerberg started Facebook in 2004, of course, smartphones didn't exist. Now, he pointed out, he spends all his time on his smartphone. He even said that he wrote his letter to shareholders -- the one included in the S-1 -- on his phone.
This shift, he said, shows how good "mobile is for us."
Why? He rattled off the reasons: There are more users on mobile. There is more engagement. And people on mobile spend more time on Facebook.
And then came a comment that Zuckerberg likely would not have said in the days when Facebook was private company: "We think we'll make a lot of money" from mobile. And this, he said, is a key thing that people (read: Wall Street) doesn't understand about Facebook.
Facebook, he summarized, is now a "mobile company."
One other thing that investors might like from Zuck's talk: he said Facebook has a team working on search. "We do a billion queries and day and we aren't even trying. Mostly, they are trying to find people or brand pages or apps. There is a big opportunity in search, evolving to giving a set of answers to a specific question, and Facebook is uniquely position to do that."
Zuckerberg gave an example of how Facebook could do search better than Google or Microsoft: "Which of my friends or friends of friends work in a company I might like to work at."
"At some point we will do it," he said.
Ultimately, no one watching could doubt Zuckerberg's commitment to his creation.
When asked whether he was still having fun, he said that he doesn't think about his work at Facebook in that way. Instead, he said, "I think about the mission."
In other words, he is a missionary, focused on achieving his goal of colonizing the planet for the better on the Facebook platform. And he thinks being underestimated is better, so Facebook can do things that surprise people, play the underdog.
But Facebook is no underdog with nearly a billion users and more time spent on its social platform the most other platforms put together. The challenge for Zuckerberg and Facebook at this junction isn't to surprise people, but to become the company it said it could be for its employees, shareholders, and users.
Zuckerberg appears to be getting the message, acknowledging in the interview that the mission and the business have to go hand-in-hand. "It's a great time for people to join [the company] and to stay and double down," he said as he pushes the company to double down on mobile.