Zuckerberg lifts Facebook's battered stock
NEW YORK (AP) — CEO Mark Zuckerberg's talk of Facebook's mobile prospects and his acknowledgment that the company cares about making money as well as making the world "more open and connected" lifted the battered shares of the social networking icon on Wednesday.
On Tuesday, Zuckerberg spoke at a tech conference in San Francisco in his first interview since Facebook's rocky initial public offering in May. The stock has lost roughly half its value since the IPO. On Wednesday it gained $1.50, or 7.7 percent, to close at $20.93, still 45 percent below its IPO price of $38.
"He explained past missteps and challenges related to mobile and provided reasons for related optimism," wrote S&P Capital IQ equity analyst Scott Kessler in a note to investors. "In addition, Zuckerberg expressed disappointment related to the IPO and stock price, but indicated (that Facebook) cares about its shareholders, and that the company has had its share of ups and downs over the years."
Some on Wall Street had been questioning Zuckerberg's ability to lead a large public company. But the 28-year-old seemed to reassure investors during his half-hour appearance, where he appeared at ease in front of an audience of Silicon Valley bloggers, journalists, developers and others. He also signaled that Facebook will likely intensify its rivalry with Google Inc. by getting into the search business.
As it is, Facebook already processes about 1 billion search requests a day, Zuckerberg said, "and we basically are not even trying."
A more robust search engine "would be one obvious, interesting thing for us to do in the future," he said during an interview with blogger-turned venture capitalist Michael Arrington. Arrington is the founder of technology blog TechCrunch, which put on the conference.
Jefferies analyst Brian Pitz said Facebook's plans to enter the search business at some point are a good thing. But he adds that he "won't get too excited" until there are more details.
"Facebook already has a team in place working on search, which is not surprising given the company sees so many daily queries," the analyst wrote. "But monetization will take time and we think the relatively narrow scope of Facebook's search limits overlap with (Google), for now."