Mark Zuckerberg, CEO of Facebook, recently addressed the media and explained the growth strategy of Facebook to investors, pointing out the company’s top priorities for 2012 as being centered on transforming the manner in which users can access Facebook through their mobiles and their advertising business. They are also focusing on integration of online apps into Facebook.
Facebook, currently the dominant social networking site with 900 million users, is looking at raising around $10.6 billion, valuing the company at $90 billion, surpassing companies like Google and giving Amazon a tough competition. Facebook is at the moment heavily focused on improving their apps for mobile phones, incorporating other online applications into the social networking site and bringing about changes in their advertising experience, as stated by the CEO who was accompanied by the COO and the Chief Financial Officer of the company.
Zuckerberg advised fund managers that consumer categories should be built keeping consumers in mind. Though Wall Street may have expressed concerns about the company’s ability to earn revenue from their mobile users and the slow pace of growth of Facebook’s advertising business, the demand for their shares continues to be high and reportedly their IPO is already oversubscribed, ranging from $28 to $35 per share, placing the company’s value at $77 billion to $96 billion.
Zuckerberg was open to a session of questions following the event. Investors, who were ticked off when Facebook answered only limited questions at their event in New York earlier, threw in doubts regarding capital spending and such. Facebook however did not allow follow-up questions.
With social ads that provide information about friends to users being an important tool used by Facebook to overcome their challenge of serving their mobile users, Facebook’s advertising business overall is being well backed up by their marketers and is fast picking up pace. These ads are suited for smartphones with small screens, the medium of accessing Facebook for most mobile users. Facebook will be better equipped to offer more relevant mobile ads once it starts collecting more user data.
Facebook’s acquisition of the Instagram platform for mobiles at $1 billion has seen a sharp rise in the number of people who use Instagram already. Facebook, followed by several other web companies, is now fast challenging leading companies like Google and Yahoo, fighting for consumers who spend time online and the revenue earned through advertising. Investors are pleased with the fact that Facebook seems to have a clear vision of their goals for the future.
