n his first public address on Facebook’s plummeting value, Mark Zuckerberg has unsurprisingly labelled the drop in his company’s market value as “disappointing”. Having closed at $19.43 yesterday, shares in the social network site have lost just shy of half their value since the Initial Public Offering (IPO) in May 2012, when they opened at $38 per share.
Mark Zuckerberg’s address at the TechCrucnh Disrupt Conference in San Francisco yesterday wasn’t intended to be a tale of woe; far from it. He was understandably downbeat about the share value’s negative impact on both staff recruitment and retention, but this is no revelation. The wider public will appreciate this candid honesty from the social network’s chief, but the true purpose of this address was to highlight Facebook’s unerring dominance in the fiercely competitive realm of social media. Most importantly though, it was to underline future growth plans centred around mobile technology.
If you were to ask a room-full of Facebook critics what the social network’s Achilles heel was, the general consensus would undoubtedly be the lack of mobile integration. During this conference, Zuckerberg acknowledged this failing and made it very clear that it was right at the top of his priority list: “Literally, six months ago we didn't have an ad on mobile. Over the next three to five years, the biggest question on everyone's mind is really going to be how well Facebook does with mobile.”
Earlier this year, Facebook introduced native apps for both Apple’s iOS and Google’s Android smartphones. The reason for this was simple, “Ads have to be more integrated into the product on mobile." Zuckerberg went on to say: “It is really clear from the stats and my own personal intuition that a lot of energy in the ecosystem is going to mobile, not desktop. That is the future. We are going to be doing killer stuff there.”
There has been a sharp rise in Facebook naysayers in recent months. The significant reduction in share value has done little to ease the minds of investors, or indeed encourage new backers. This address was a masterstroke from Mark Zuckerberg, intended to put some wind back in the sails of the social network. While it is relatively unusual for a company’s CEO to publically reveal future business strategy, this public appearance was a very clear statement of intent. Facebook know where the money is; and most importantly, they know how to get to it.
Zuckerberg also took the opportunity to dispel rumours of a Facebook mobile device. "If we make a phone we could get maybe 10 million users? 12 million users? That doesn't move the needle for us. Building a phone is the wrong strategy for us." Again, this was an acknowledgement of Facebook’s core competencies, and where they plan to invest their time and money. These topics were addressed for one simple reason – to regain confidence in the business model of Facebook both internally and externally (and to inherently inspire future investment).
While it seems bizarre to doubt the strategic credentials of a social network that has attracted almost 1bn active users, "There are tons of people that are super-pessimistic," Mr Zuckerberg said. "I would personally rather be underestimated. It gives us latitude to go out and make some big bets." Mark Zuckerberg is clearly a man who thrives on adversity and these ‘big bets’ are the platform that he believes will help re-establish confidence in Facebook, and set them on their way to restoring their share value. With some 444 million shares to his name, it would be fair to say that Zuckerberg has both the drive, and interest, in masterminding this success.
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