News Column

Facebook CEO Zuckerberg Says Mobile Efforts Will 'Make a Lot More Money' than Website

Sept. 12, 2012
Facebook CEO Zuckerberg

In his first public appearance since Facebook's trouble-plagued Wall Street debut, CEO Mark Zuckerberg conceded Tuesday the company's stock performance "has obviously been disappointing," but vowed Facebook's fledgling mobile business will "make a lot more money."

"We think that's the future. We're going to be doing killer stuff there, he told a tech industry conference. A few minutes later, he also implied Facebook could challenge larger rival Google (GOOG)

by competing in the Internet search business.

Zuckerberg, who appeared at the TechCrunch Disrupt conference wearing a T-shirt and jeans, spoke rapidly during an onstage interview, apparently determined to stress key talking points for a much broader audience of investors, analysts, advertisers and competitors around the world.

Investors seemed reassured by Zuckerberg's comments, which were carried live on the Internet. Facebook stock rose more than 3 percent in after-hours trading Tuesday, climbing above $20 for the first time in weeks, after it plunged over the summer from its initial offering price of $38.

Zuckerberg used his 30-minute interview with Michael Arrington, founder of the industry news blog TechCrunch, to

emphasize mobile efforts, which have been a sore point for Facebook.

Until recently, the company had no mobile revenue even though its own data shows people are increasingly using the social networking service on mobile devices rather than traditional PCs. Facebook reported $1 billion in profit last year on nearly $4 billion in revenue, but its growth has slowed and several financial analysts have recently trimmed their projections for Facebook's revenue this year.

The company had no mobile ads six months ago, Zuckerberg said, so "it's easy for a lot of folks to really underestimate how fundamentally good mobile is for us." But recent efforts have found Facebook users spend more time on mobile devices and respond more frequently to its new mobile ads, he said.

"There's more engagement per person," he said. "We think we're going to make a lot more money there than on the desktop."

Facebook's biggest mistake, Zuckerberg added, was a decision two years ago to build its mobile platform using HTML5 Web programming standards that performed poorly. He said the company was forced to scrap months of work when it decided to start over with different tools.

But the 28-year-old CEO touted the company's recent

overhaul of its interface for Apple's (AAPL) iPhone and iPad; he said a new interface for Android devices is also coming.

Zuckerberg acknowledged that the sharp decline in Facebook's stock has had an effect on employee morale and the company's ability to keep top talent.

"It doesn't help," he conceded, while adding that Facebook has had "ups and downs" in terms of public attention in the past. "People at Facebook are fairly used to it," he said.

Zuckerberg spoke briefly about some of Facebook's future plans: He reiterated that the company has no intention of building its

own smartphone. But he said Facebook is likely to enter the Internet search business at some point, after noting that it already handles "a billion" searches every day and has engineers working to improve its search functions.

While he said the company has no immediate plans to announce its own search business, Zuckerberg's comments are sure to draw attention from Google, the dominant Internet search company. Analysts say Facebook's "walled garden" of pages that are available only to users with passwords is already a threat to Google's search business, which depends on giving its users as much of the Internet as possible.

Returning again to the subject of Facebook's mobile efforts, Zuckerberg said he has high hopes for increasing the uses of Instagram, the popular mobile photo-sharing service that Facebook recently acquired.

On a personal note, he added, "I basically live on my mobile device." Zuckerberg even told Arrington that he wrote his introductory letter to investors, which was included in the company's regulatory filings last spring, on a mobile gadget.

In that letter, Zuckerberg spoke of Facebook's "mission" to connect everyone in the world, asserting that the company wanted to make money so it could build services, rather than building services to make money.

When asked about that Tuesday, however, Zuckerberg was quick to say that the company has always had a dual mission of building services and revenue. In a comment clearly aimed at investors, he added, "from the beginning, we had this understanding that we had to do both."



Source: (c)2012 the San Jose Mercury News (San Jose, Calif.). Distributed by MCT Information Services