Mark Zuckerberg dangles mobile & search, no smartphone

May 10 2013, 16:56 IST
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SummaryFacebook CEO Mark Zuckerberg soothed investors in his first major public appearance since the No. 1 social network’s rocky May IPO, breathing life into its struggling shares after hinting at new growth areas from mobile to search.

Facebook CEO Mark Zuckerberg soothed investors in his first major public appearance since the No. 1 social network’s rocky May IPO, breathing life into its struggling shares after hinting at new growth areas from mobile to search.

Zuckerberg asked Wall Street to be patient as the company developed new products, addressed issues such as employee morale, and dashing rumours Facebook may build a smartphone. Facebook became the first US company to debut on stock markets with a value of more than $100 billion. But it has since lost more than half of its capitalisation as investors fret about slowing growth and the company’s challenges making money as users shift from PCs to mobile devices.

Zuckerberg, who has himself lost billions of dollars on paper since Facebook’s market debut, admitted to disappointment about his company’s crumbling share price, but argued Wall Street has yet to grasp the full potential of its fledgling mobile business.

His comments helped drive Facebook shares up more than 3 percent after hours to above $20, building on a 3.3 percent gain in regular trade on Tuesday. The stock is still well off its $38 debut price.

“It was positive just to see him out there speaking,” said Raymond James analyst Aaron Kessler. “He was hinting that the stock was undervalued, and we’ll see about that. But he’s looking at this business as a multiyear investment, even if investors are looking for results much sooner.”

Speaking at the TechCrunch Disrupt conference in San Francisco on Tuesday, Zuckerberg highlighted Facebook’s progress in mobile over the past six months and the company’s room for growth.

Facebook’s recently released mobile ads are already delivering better results for advertisers than the traditional “display” ads that appear on the right-hand side of the social networking service on PCs, Zuckerberg said.

“One of the main things that I think is misunderstood right now is how fundamentally good” the company’s mobile prospects are, he said.

ADVERTISING, SEARCH

While declining to offer details, Zuckerberg hinted that the company was halfway through a cycle to “retool” and offer new advertising products. He also said he believed search could be a ripe area of growth for Facebook and was working to offer a competitive search product -- comments that likely interested executives at Google Inc ( GOOG.O ), one of Facebook’s fiercest competitors.

Facebook has a team working on the social network’s existing search feature, which already garners roughly 1 billion queries every day, Zuckerberg noted. But

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