Zuckerberg: Time to ‘double down’ on Facebook

MICHAEL LIEDTKE

AP Tech­nol­ogy Writer

SAN FRANCISCO — Face­book CEO Mark Zucker­berg hasn’t enjoyed see­ing his company’s stock get pum­meled on Wall Street this sum­mer, but he is rel­ish­ing the oppor­tu­nity to prove his crit­ics wrong.

“I would rather be in a cycle where peo­ple under­es­ti­mate us because I’d rather be under­es­ti­mated,” Zucker­berg said Tues­day. “I think it gives us the lat­i­tude to go out and make some big bets.”

Zucker­berg, 28, made his remarks before a standing-room-only audi­ence at a tech con­fer­ence in San Fran­cisco in his first inter­view since Face­book Inc.’s rocky ini­tial pub­lic offer­ing in May.

The social net­work­ing leader’s stock has lost nearly half its value since the IPO. More than $50 bil­lion has been lopped off Facebook’s mar­ket value as the company’s shares have fallen from $38 to Tuesday’s clos­ing price of $19.43.

No one has lost as much as Zucker­berg, who has seen the value of his Face­book hold­ings fall about more than $9 bil­lion. That while hear­ing more skep­tics second-guess his abil­ity to lead the com­pany that he founded eight years ago in his Har­vard Uni­ver­sity dorm room.

Since speak­ing dur­ing Facebook’s first earn­ings con­fer­ence call as a pub­lic com­pany nearly seven weeks ago, Zucker­berg has remained largely out of the spotlight.

Wear­ing a gray T-shirt, jeans and sneak­ers, Zucker­berg looked at ease through his half-hour appearance.

He smiled fre­quently and even chuck­led a few times before a San Fran­cisco audi­ence com­posed largely of fel­low geeks who, like him, tend to enjoy talk­ing about com­puter cod­ing and build­ing cool prod­ucts instead of dis­cussing rev­enue growth and busi­ness strategies.

Yet Zucker­berg clearly was aim­ing many of his remarks at investors. He empha­sized that Face­book cared about mak­ing money as well as pur­su­ing his mis­sion to make the world a “more open and con­nected place.” He also repeated his belief that the com­pany would fig­ure out numer­ous ways to profit from the grow­ing num­ber of its 955 mil­lion world­wide users who visit is online hang­out through mobile appli­ca­tions instead of Web browsers on desk­top computers.

Zucker­berg said the per­for­mance of Facebook’s stock “has obvi­ously been dis­ap­point­ing,” but he said it’s a great time to “dou­ble down” on the company’s future.

“I think it is really easy to for folks to under­es­ti­mate how really fun­da­men­tally good mobile is for us,” Zucker­berg told his inter­viewer, for­mer blog­ger turned ven­ture cap­i­tal­ist Michal Arring­ton, at the TechCrunch Dis­rupt conference.

Zucker­berg shoul­dered some of the blame for the mis­per­cep­tions about Facebook’s mobile prospects, say­ing he made a mis­take by ini­tially rely­ing on a com­puter cod­ing called HTML 5 so the company’s appli­ca­tions could run on a mul­ti­tude of dif­fer­ent mobile oper­at­ing sys­tems with­out mak­ing a lot of changes. That resulted in sub-par expe­ri­ences for many users, Zucker­berg acknowl­edged, prompt­ing Face­book to use more cus­tomiza­tion tools to account for the dif­fer­ences in the soft­ware that run dif­fer­ent devices such as the iPhone and Android phones.

Some investors evi­dently liked what Zucker­berg had to say. Face­book shares gained 66 cents, or 3.4 per­cent in Tuesday’s extended trad­ing after he took the stage.

The ubiq­uity of smart­phones has cre­ated prob­lems for Face­book and other advertising-dependent Inter­net com­pa­nies because the smaller screens on those devices have less space to show com­mer­cial mes­sages around the main content.

One way Face­book will address that chal­lenge is by insert­ing more ads into the mobile news feeds that high­light sta­tus updates and pho­tos shared by users’ friends and fam­i­lies, accord­ing to Zucker­berg. He once again tried to shoot down recur­ring spec­u­la­tion that Face­book is devel­op­ing its own smart­phone like Apple and Google Inc.

“It is so clearly the wrong strat­egy for us,” Zucker­berg said. “It doesn’t move the nee­dle for us.”

But that doesn’t mean Zucker­berg doesn’t appre­ci­ate the power and allure of a sleek smart­phone. He said he even used one to write a lengthy man­i­festo about his vision for Face­book that was included in the company’s IPO documents.

Zucker­berg indi­cated Face­book is likely to inten­sify its rivalry with Google Inc. by devel­op­ing more ways to search on its web­site. As it is, Face­book already processes about 1 bil­lion search requests a day, Zucker­berg said, “and we basi­cally are not even trying.”

That laid-back atti­tude toward search will even­tu­ally change, Zucker­berg said, although he wouldn’t pro­vide specifics. A more robust search engine “would be one obvi­ous, inter­est­ing thing for us to do in the future,” he said.

Google is already try­ing to main­tain its dom­i­nance of its Inter­net search engine with an alter­na­tive social net­work called Plus that it launched last year largely to gain more insights about its users’ preferences.

Zucker­berg has sig­naled his faith in Facebook’s stock by pledg­ing not to sell any of his more than 503 mil­lion shares for at least another year, even as some of the company’s early investors and employ­ees reduce their holdings.

Tues­day gave him an oppor­tu­nity to deliver a reminder that Face­book has over­come past adver­sity when changes to its website’s design and pri­vacy poli­cies pro­voked stri­dent objec­tions from users who threat­ened to aban­don the social net­work. Face­book over­came those protests to keep on growing.

“Face­book has not been an uncon­tro­ver­sial com­pany,” Zucker­berg said. “It’s not like this is the first up and down we have ever had.”

Posted by AP News on Sep 11 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.