The boss of the world’s biggest social network has answered criticism about taking Facebook public for the first time.
Speaking in front of the TechCrunch Distrupt audience in San Francisco, 28-year-old Mark Zuckerberg said he was obviously disappointed about Facebook’s falling share prices but he hinted at more services to come, saying Wall Street had not fully grasped his company’s true potential.
Facebook, which is used by nearly a billion people worldwide, hit all the business headlines when it went public in May. The subject of $100m-grossing The Social Network, Facebook’s stock market debut was one of the most talked about of all time.
But, so far, the firm which was originally born in a dorm room has failed to live up to all the hype.
On day one, Facebook broke all IPO trading volume records but still ended its first 24 hours down by $4 from a strong early opening of around $42.
And, since then Facebook has failed to set the stock market on fire. Becoming the first US company to deput on the markets with a value of more than $100bn, it has since lost more than half of its capitalisation as investors show they have concerns about its slow growth.
But speaking to a standing-room only audience, Zuckerberg said he was certain he would prove his doubters wrong.
He said that while Facebook’s ultimate mission was to make the globe a “more open and connected place,” it was also very serious about making money.
Zuckerberg admitted that he was obviously disappointed by falling stock prices and that the company’s woes were having an impact on staff morale.
But he added that Google was in it for the long game. He threw aside any notions that Facebook might offer its own smartphones in the future, saying that was “so clearly the wrong strategy for us”.
Instead, he hinted that Facebook could eventually enter the search engine business, to take on the might of Google, pointing out that the company already processes one billion searches every day “without even trying”.
Zuckerberg also said that Facebook’s long-term strategy was to concentrate on mobile phone users in a bid to make money through the site. “There is a huge opportunity,” he said. “Now the question is getting there.”
He said his strategy was to “build a system that is as deeply as possible integrated into every major device that people want to use.”
His speech came just before Apple unveiled its new iPhone 5 and Zuckerberg will certainly be hoping the American technology giants customers become Facebook consumers via their smartphones.
Zuckerberg’s appearance certainly seems to have done the trick, with shares jumping 5.4 per cent to $20.47, taking the price back up above $20 for the first time since mid August. Its all-time low was on September 4 when prices were $17.55.
Analyst at Topeka Capital Markets Victor Anthony said he was now “incrementally more positive” about the company’s ability to navigate the future. Zuckerberg just has to hope he has convinced the rest of his doubters.