Zuckerberg to take on Google, but Facebook phone is dead
Facebook share slide halts as Mark Zuckerberg promises to make lots of money from mobile ads
MARK ZUCKERBERG has soothed the fears of battered Facebook investors by promising to raise the company's game on mobile platforms and suggesting he is planning to take on Google by developing an improved search engine.
However, he poured cold water on one of the tech world's favourite rumours by rejecting the idea of a Facebook phone.
Zuckerberg's words, at the TechCrunch Disrupt conference in San Francisco, sparked a rally in Facebook shares, which have shed half their value since the company's botched flotation in May.
Zuckerberg admitted that the performance of Facebook stocks since the IPO had been "disappointing" but said, "It's not the first up and down that we ever had."
He also accepted that Facebook had "burned two years" by using web-based HTML5 technology to develop mobile apps rather than building them specifically for Apple and Android smartphones. `
"Probably we will look back and say that that was the biggest mistake, the biggest strategic mistake we made," he said.
That error has now been corrected, Zuckerberg believes. "Over the coming weeks and months, expect to see a lot of the cool stuff people have been working on," he said. "We've transitioned, and are now a mobile company."
"I think it is really easy for folks to underestimate how really fundamentally good mobile is for us," he added. "We think we'll make a lot more money than on the desktop."
Zuckerberg also hinted at a raid on Google's turf by noting that search is "obviously an interesting thing for us to do in the future". He added: "We do one billion queries a day and we're not even trying." Most of these searches are for people, businesses and Facebook apps and the area is in line for development.
But Zuckerberg poured cold water on the idea of a Facebook phone - a rumour that has been doing the rounds for years. "It's so clearly the wrong strategy for us," he said.
Zuckerberg's words were well-received by investors and delivered a much-needed boost to Facebook shares. The company's stock increased 3.3 per cent yesterday and closed at $19.43. However, it is still half the $38 per share opening price when Facebook floated in May.
"It was positive just to see him out there speaking," Raymond James analyst Aaron Kessler told Reuters. "He was hinting that the stock was undervalued, and we'll see about that. But he's looking at this business as a multi-year investment, even if investors are looking for results much sooner."