When it came to Facebook's newfound health on mobile, they shared lots. So much, in fact, that it obscured hot topics such as the engagement potential of the just-rolled-out Graph Search; Facebook Gifts; and the Instagram backlash over the terms of service mess.
Intentional oversights? Absolutely. Wise withholdings? The jury's still out as investors consider -- maybe guess is a better word -- just how all of Facebook's bets will play out. The company doesn't provide financial forecasts. Shares of Facebook sold off 8 percent early in the day but ended Thursday down less than 1 percent, at $30.98.
"Openness is important to Facebook," a representative said, when asked why the company doesn't provide financial guidance for Wall Street. "We're a fast-growing and changing business, and we work hard to provide the metrics that are the most helpful to understand our business."
So which metrics did Facebook deem unhelpful? The ones you probably want to know about most.
Why is Gifts a dud?
Facebook Gifts, which now includes the Facebook Card, may be a diamond in the rough, but right now that diamond is looking pretty darn rough. At least Facebook was upfront about that.
"This past quarter, payments and other revenue also included around $5 million from sources outside of games, primarily user promoted posts and to a lesser extent from our new Gifts product," Chief Financial Officer David Ebersman said.
Read that statement again. One conclusion is that Gifts brought in less than half of the $5 million figure in revenue in the fourth quarter, and that's just plain terrible. Facebook went on to warn that the Gifts product will not bring in considerable revenue in 2013.
Instead of telling us why Gifts isn't making money, which we suspect has to do with a terrible experience on mobile (where Facebook users live these days), Ebersman just danced around the subject with the company's status-quo retort about products coming before revenue. Facebook is "just figuring out how the product needs to work," he said.
The explanation avoids one potential reality: that giving gifts through Facebook isn't an experience people actually want.
What's up with Instagram?
Facebook, even Wall Street, seems to have temporary amnesia. Zuckerberg, Ebersman, and COO Sheryl Sandberg all avoided the topic, and analysts didn't press for answers in the question-and-answer portion of the call. The execs talked glowingly of Instagram's performance and potential -- "photos and Instagram are doing well," Zuckerberg said -- but gave us nothing to really grasp.
We could give Facebook a pass. After all, the Instagram deal only just closed in September and Facebook has yet to truly integrate the two products. The hysteria around the proposed policy changes, however, should have been enough for Facebook to tell us something -- anything at all really -- about the application's well-being, even if just to silence the haters.
"Instagram has continued growing very quickly, and hopefully we'll have some new milestones to share with you all soon," was all Zuckerberg could muster.
For now, we're stuck with the 90-million-monthly-active-user stat shared earlier this month.
Any early signs that people like Graph Search?
Graph Search was mentioned all of eight times on the call, which wasn't a lot for a product Facebook has dubbed a third-pillar service as important as News Feed and Timeline.
Graph Search, launched in limited release earlier this month, is the social network's structured search engine that acts as a gateway to people, products, places, and interests. It's also a potentially lucrative vehicle for serving targeted ads. Wedbush analyst Michael Pachter predicts that the curated search product will add $3 billion to $4 billion in revenue by 2015.
"I do want to temper near-term expectations a little bit on revenue coming from other areas like Gifts or Graph Search," Zuckerberg said.
The company also didn't put forth a timeline around a more widespread release, give investors any hint that Graph Search was improving engagement rates, or share anything beyond what has already been said. Zuckerberg focused instead on broad talking points such as Graph Search's distinctness from traditional Web search, Facebook's focus on getting the product right, and so on.
But here's the thing: If you want to know why Facebook is going to be spending like crazy in 2013, look no further than Graph Search. "Products like Graph Search...are things that we want to invest in aggressively," Zuckerberg said. "Based on this, we made the decision to continue to grow our head count quickly in 2013, particularly in product development."
In a nutshell, Facebook's plans to spend 50 percent more in 2013, which adds up to roughly $1.4 billion more than last year's expenses, have to do with its interest in improving Graph Search. That's one expensive search engine.
How much revenue from mobile app install ads?
The most exciting product release of the fourth quarter, at least in terms of revenue potential, was mobile app install ads. The units are designed for third-party app-makers who want to get Facebook's mobile users to install their apps. The units were made available to all developers in October, and, by all accounts, are working marvelously.
Facebook said mobile app install ads are used by 20 percent of the top grossing iOS apps, and that the social network is now the top driver of awareness of new mobile app downloads.
OK, great. Now where's the financial proof that the ads are a hit? We didn't get it, in part because Facebook breaks out the revenue of individual products only when it wants to.
What's the run rate of News Feed ads?
Three months ago, Facebook bragged about how good it was getting at making money from ads in the News Feed. The company said it was making a total of $4 million a day from the in-stream placements by quarter's end, and that $3 million was coming from mobile News Feed ads.
The market loved the reveal, and Facebook's stock spent the past 90 days climbing back toward its IPO price on the belief that the company could monetize its burgeoning mobile audience.
Sadly, this time around, Facebook said nothing about the revenue it's pulling in from the six-month-old units. And based on statements Ebersman made last quarter, it sounds as if Facebook won't be sharing the run rate on News Feed ads moving forward. That's no fun.
We get it, though. Some analysts were getting a little carried away with their calculations. Facebook said it made 23 percent of its advertising revenue from mobile in the fourth quarter, which amounts to about $306 million. Some firms, like Macquarie Equities Research, used last quarter's run-rate reveal to project a much higher mobile advertising revenue figure of $380 million.
The simple reality is that the lack of run rate guidance gives Facebook more leeway and allows it to get away from needing to show meaningful growth in revenue from this unit.
Where's the financial guidance for the current quarter?
Public companies tend to share financial guidance for the upcoming quarter to keep Wall Street's expectations in check. It's a dance many do with the Street, often one that helps steer the direction of the stock. Not Facebook. The social network showed once again that it has no intention of providing quarterly guidance, a decision that investors tend not to appreciate.
Why risk pissing off the people who keep its share price afloat? Because disappointing those same people would be even worse. Facebook has no desire to be held accountable for a fluctuating and seasonal business that even it doesn't fully understand yet.
Instead of revenue or earnings projections, Facebook said that expenses will balloon in the year ahead. Total expenses, excluding stock-based compensation, will grow by around 50 percent in 2013, Ebersman said.