Facebook's Zuckerberg admits 'missteps'

8:59 PM, Sep 11, 2012   |    comments
Mark Zuckerberg. Credit: AP/file.
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By Jon Swartz, USA TODAY

SAN FRANCISCO - Admitting Facebook's stock price has been "disappointing," a resolute Mark Zuckerberg assured a tech gathering here that the social-networking company is still strong and ready to make a big mobile push.

"I think a bunch of people" are underestimating us, the CEO said in his first public remarks since Facebook's star-crossed IPO in May. He spoke for 40 minutes at the TechCrunch Disrupt conference. "Some days are hard, some days kick ass."

Zuckerberg has largely been invisible since Facebook went public. On Tuesday, he broke his silence. Investors seemed to like what they heard: Facebook shares rose about 3.5% in after-hours trading after closing the regular trading day at $19.43.

"Its performance has obviously been disappointing," Zuckerberg said of Facebook's stock, which is trading at about half its offering price of $38 a share. If Facebook "executes (its) mission, we think we will build value in the long term," he said. "The big question is how well we do with mobile."

Despite self-acknowledged "missteps" in shifting to mobile, Zuckerberg said the company is finding effective ways to reach its members with advertising and has upcoming mobile services that will take advantage of mobile ads. It's just a matter of time, he said, before that translates into significant revenue.

Market researcher eMarketer expects an uptick in Facebook revenue next year, after its mobile-ad services kick in. It predicts Facebook's U.S. mobile-ad revenue will jump to $387 million in 2013 from $72.7 million this year but that annual revenue will be about $5 billion, down from the $6 billion it predicted in February.

In a wide-ranging interview with TechCrunch founder Michael Arrington, Zuckerberg touched on:
•A rumored Facebook phone. "Clearly, it is the wrong strategy for us. Our strategy is to ... build a system that is as deeply integrated into every device in the world."
•Search. "It's obviously an interesting thing for us to do in the future."
•Zynga. "They have had a rough few quarters but are fundamentally a strong company."
•Instagram. "They are killing it, with 100 million registered users. ... There is no intention to force them into our infrastructure."

Facebook's IPO raised $16 billion but left many investors with losses and heightened skepticism over how Facebook converts 1 billion users into substantial, long-term revenue.


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