In his first public appearance since his company's sluggish IPO, Facebook co-founder and CEO Mark Zuckerberg called the social network's stock performance "disappointing."
Facebook co-founder and CEO Mark Zuckerberg responded to questions during a session at the Tech Crunch Disrupt conference in San Francisco on Tuesday.
He also said that Facebook is pushing hard on mobile and will dive into search at some point, and he insisted that there are no plans for a phone. He said 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 in 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.
Instead, the company's stock has been hammered, its price sinking instead of growing. On Tuesday, the company's share price closed the day at $19.43.
In recent weeks, talk turned to whether a seasoned businessperson 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 the conference stage, Zuckerberg came across as calm and with a vision of where he wants to take his company. That vision is largely focused on mobile.
The move toward mobile may signal a shift from the pre-IPO days when there were doubts about Facebook's readiness to compete in the burgeoning mobile market. Facebook itself, in its pre-IPO filings with the U.S. Securities and Exchange Commission (SEC), 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."
"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 expecting Zuckerberg to fall on his sword, investors and analysts want to hear what the CEO is doing to move the company forward, Olds said. While Zuckerberg said the right things about mobile, Olds said he's waiting to see how it 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."
He 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," Zuckerberg said. "We go in waves. At times people think everything 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 rumors that the company is developing a phone, and he repeatedly pushed those questions 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?
Search.
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 said. "I think there's a lot of opportunity there and we'll have to some day go after that."
Zuckerberg said he didn't have anything specific to announce about search, but said it would be an obvious thing for the company to do in the future.
