Mark Zuckerberg took the stage Tuesday afternoon at TechCrunch Disrupt, San Francisco’s annual and much-buzzed digital pow-wow, to give his first interview since his company’s disastrous IPO. With Facebook now trading at about half its IPO price, the young CEO had a lot to answer for. But Zuck looked good: chuckling, energetic, and (dare we say it) a little buffer than usual. In a particularly metaphorical moment, TechCrunch CEO Michael Arrington (an old friend) asked the world’s richest 28-year-old if he still codes—and if his code ever breaks. “Everything I do breaks,” joked Zuckerberg. “But we fix it quickly.” The audience burst into applause.
When asked flat-out if the company’s market woes were dashing employee morale, Zuckerberg was more circumspect. “It doesn’t help,” he said. “But what really motivates people at Facebook is building stuff that they’re proud of.” He was also quick to point out that Facebook compensates its employees by translating a fixed cash value into shares. That means, “if the shares are undervalued, you get more,” he said. “I think it’s a great time for people to join. And stay, and double down.” Nodding, and gesturing to the audience, Arrington said, “They liked that answer.”
Whether the markets will, when they open tomorrow morning, remains to be seen. According to data from SecondMarket, where Facebook stakes were privately traded before the IPO, a share in Team Zuck is worth as little today as it was in November, 2010. The sad reality is that, despite the company’s growth and new mobile focus, the market still likes Facebook far less than it used to. Here’s the price of a Facebook share on SecondMarket, from April 2008 to April 2012, in chart form.
And here’s Facebook’s post-IPO plummet:
Last Tuesday, Zuckerberg gave his own, Federal Reserve style “forward guidance,” announcing that he wouldn’t sell any of his 444 million shares for at least a year. That gave the stock a bit of a bounce. And beyond market machinations, the CEO today lauded a new emphasis on mobile—a strategy that he’s betting will reassure investors spooked by the company’s slowing new-user figures. “Our mobile ads perform better than our right-hand column ads,” he said, and rattled off some impressive stats on phone app adoption. (An excitable audience member gasped, “Really?”) Pressed on hardware—and the possibility of a Facebook phone—Zuckerberg remained stubborn. “The phone just doesn’t make any sense,” he said. “That’s always been the wrong strategy for us. We could get 10 million people to use it, but that doesn’t even move the needle for us.” What about search, and competing with Google? “We do on the order of a billion queries a day and we’re not even trying.”
The big bet seems to be to use old strategies on a new platform: not to build up a brand new business-model in the wake of the horrible IPO. As Zuckerberg put it, “the main thing that’s misunderstood right now is how fundamentally good [our mobile strategy] is, on a lot of levels … We’re going to make a lot more money on mobile than we are on desktop.” The CEO even said that he wouldn’t be fiddling around with Instagram, whose acquisition value has been falling along with Facebook’s. By all accounts, the buy must have been defensive—Zuckerberg almost said as much today. “They’re killing it,” he said of the young company. “We want to help it grow to hundreds of millions of users. But we have no agenda in terms of making them go into our infrastructure. We think that’s primarily a waste of time.”
Joining Facebook hurt Instagram, and the company’s catastrophic stock slide hurt its own employees, not to mention regular investors. Now, Zuckerberg is asking for your faith—and your phone.