Facebook Inc. (FB:US) Chief Executive Officer Mark Zuckerberg, clad in a gray T-shirt, told investors that the company is taking steps to make money from its mobile-user base and that his decision to buy Instagram wasn’t rash, according to people who attended the meetings.
Zuckerberg, crisscrossing the U.S. to pitch Facebook’s planned initial public offering to potential investors, fielded questions about growth in the number of people who access the site from wireless devices as well as demand from advertisers willing to reach that user base, said the people, who asked not to be identified because the meetings were private.
Some investors have balked at buying shares in the IPO after Facebook said on May 9 that advertising growth hasn’t kept pace with the gains in users, many of them via mobile devices, people with knowledge of the matter said yesterday. Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company.
Zuckerberg was flanked by Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Ebersman at today’s presentation for more than 100 investors at the Crowne Plaza Cabana Hotel, less than eight miles from Facebook’s headquarters in Menlo Park, California.
Facebook executives were introduced by Michael Grimes, global co-head of technology investment banking at Morgan Stanley (MS:US), which is handling the IPO. Facebook directors Jim Breyer and Marc Andreessen were among attendees at the lunch meeting, which got under way shortly after noon local time and featured chicken salad.
In addition to Andreessen, co-founder of venture capital firm Andreessen Horowitz, and Breyer, a partner at early Facebook backer Accel Partners, Silicon Valley angel investor Ron Conway was also at the event.
About a half-dozen security guards wearing earpieces and black turtlenecks guarded doors and paced the floor of the hotel. In the back courtyard, supporters of the Penn State women’s rugby team held a leisurely luncheon to prepare for a championship tournament this weekend. Even with temperatures over 80 degrees Fahrenheit, the hotel’s pool was closed due to heightened security. Certain hallways were also blocked.
Zuckerberg delivered a brief speech during the meal and answered questions along with Sandberg and Ebersman, the people who attended the meeting said. Zuckerberg fielded most of the questions, the people said.
An inquiry about the details behind Facebook’s $1 billion acquisition of Instagram, which makes mobile applications for sharing photos, prompted Zuckerberg to explain that he had been observing Instagram’s growth and had consulted with his company’s board of directors.
Institutional investors including Franklin Resources Inc. and Capital Research & Management Co. were scheduled for individual meetings with Facebook executives at the company’s headquarters this afternoon, according to two people familiar with the plans.
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