Facebook's Zuckerberg says mobile first priority
Facebook CEO Mark Zuckerberg, whose limited role in promoting the No 1 social network's market debut has drawn criticism, laid out its growth strategy to investors on Friday, saying that transforming its mobile and advertising experience are top priorities in 2012.india Updated: May 12, 2012 12:56 IST
Facebook CEO Mark Zuckerberg, whose limited role in promoting the No 1 social network's market debut has drawn criticism, laid out its growth strategy to investors on Friday, saying that transforming its mobile and advertising experience are top priorities in 2012.
Integrating online apps more strongly into Facebook is also a major goal, he told hundreds of investors at an event that capped the first week of Facebook's cross-country "roadshow" to pitch its highly anticipated initial public offering.
Facebook aims to raise about $10.6 billion, dwarfing the coming-out parties of tech companies like Google Inc and valuing it at up to $96 billion - rivaling Amazon.com Inc's.
Zuckerberg, 27, who started Facebook in his Harvard dorm room 8 years ago, said Facebook's key priorities in 2012 were to improve its mobile application, to build stronger ties incorporating its social network with other online apps and to create a "transformative" advertising experience.
The company is "just getting started" with its mobile app, said Zuckerberg, who appeared on stage in a grey T-shirt and dark trousers at Palo Alto's Crowne Plaza, flanked by chief operating officer Sheryl Sandberg and finance chief David Ebersman.
With 900 million users, Facebook is the world's dominant social network. Zuckerberg was Time Magazine's Person of the Year in 2010 and was depicted in the fictionalized 2010 movie The Social Network.
"Over the next 10 years or so, every consumer category should be transformed to be built around people," Zuckerberg told fund managers and Silicon Valley glitterati such as Netscape co-founder and venture capitalist Marc Andreessen.
"People will listen to music and watch TV with other people" through Facebook.
"We only recently reached this tipping point," Zuckerberg said as the audience consumed a lunch of curried chicken salad and chocolate-chip cookies.
"It is a bit of a celebrity event," said Alice Evans with London-based F & C Asset Management.
"You're not expecting to learn that much but it's as close as you can get to kicking the tires."
No stopping it?
Wall Street had been concerned about the company's ability to wring revenue from mobile users, considered crucial for long-term growth, as well as slowing growth in Facebook's main advertising business.
But that may not dampen demand for shares of the high-flying Web company, which is as much a cultural phenomenon as it is a business success story.
On Thursday, a source close to the process told Reuters its IPO was already oversubscribed, a week before final pricing.
Facebook has indicated an IPO price range of $28 to $35 a share on Thursday, which would value the company at $77 billion to $96 billion.
Zuckerberg - sans his trademark "hoodie" sweatshirt - made brief introductory comments at the event, which took place 8 miles from Facebook's new Menlo Park headquarters at One Hacker Way, before opening the session up to questions.
The company had provoked some grumbles from investors earlier this week, when it took limited questions from the audience at an event in New York. And Zuckerberg skipped other stops on the roadshow this week, such Boston.
Investors managed to get in more than 10 questions at Friday's event, ranging from capital spending to regulation, even as Facebook maintained tight control over the proceedings, forbidding follow-up questions.
Zuckerberg and Sandberg said Facebook's overall advertising business was gaining steam, with increased spending by most of its marketers.
The two executives highlighted social ads as an important tool for Facebook to tackle its mobile challenge.
The ads, which incorporate information about Facebook users' friends who "like" certain products, are better suited to the smaller screens of smartphones, from which more than half of Facebook's users access the service, executives said.
As Facebook collects more user data, such as location, it will be able to offer more relevant mobile ads, executives said.
Asked about Facebook's $1 billion purchase of mobile app maker Instagram, its largest acquisition, Zuckerberg said the deal was under consideration for one to two months before it occurred. Media reports had said it was forged over a weekend.
The number of Instagram users has already grown from 30 million to 50 million since the deal was announced in early April, he noted.
Facebook's offering marks a watershed moment for the new generation of Web companies that are challenging established players such as Google and Yahoo for consumers' online time and for advertising dollars.
The company's shares, which will be listed on Nasdaq under the symbol FB, could begin trading as soon as May 18.
"They did a good job of addressing the tough questions. They have a clear vision," said one investor who attended the event but did not want to be named.
First Published: May 12, 2012 10:11 IST