Facebook's fall from IPO price casts doubt as to direction
Since then, another director and an original investor, Peter Thiel, sold more than 20 million shares, according to a filing with the Securities and Exchange Commission.
Facebook executives are taking pains to show that they continue to dream big. Doug Purdy, the director of developer products, painted Facebook’s future with great enthusiasm last Friday, when shares nearly touched the half-price milestone. One day soon, he said, the Facebook newsfeed on your mobile phone would deliver to you everything you want to know: what news to digest, what movies to watch, where to eat and honeymoon, what kind of cot to buy for your first born. It would all be based on what you and your Facebook friends liked.
Facebook’s algorithms would be refined so that it would all be sent to you – “pushed” in Purdy’s words. You wouldn’t have to search for it. What he didn’t have to say was that, in this future, you wouldn’t need Google. How would Facebook profit exactly?
“There is a tremendous amount of value in here because we’re providing the user experience value,” he said. “That means users come back to Facebook. They come back again and again and again. That allows us to show advertising.”
Purdy, tall and effusive, drew his dreams on a white board. It featured rectangles, representing mobile phones, which is where Facebook faces its most urgent challenge. “We are focused on building the right products,” he said. “At the end of the day, user experience, user desire, user engagement is the highest priority for us. Without that there is no money.”
There’s another poster on campus: “Our mobile future,” it reads. The company says it has oriented everything it does to make Facebook more attractive – and lucrative – on mobile devices. It promises to roll out new features in the coming weeks.
Analysts have pointed out that Facebook has been slow to figure out ways to make money from mobile devices; half of its users log in on phones and tablets. Given its high valuation in its initial offering, the company is under pressure to show its advertising model can deliver the lucre Wall Street expects.
Some of the scrutiny has been on Zuckerberg’s leadership. The qualities that created the fairytale aura around him, including his youth and ambition, are what even his admirers are questioning.
“I don’t think he’s doing a bad job of running the company, if that means setting the company’s direction or driving product strategy,” said one person who invested in the firm when it was still private. “He’s doing a very bad job of managing Wall Street.”
Few companies can keep the fairytale alive forever. Facebook’s campus was previously occupied by a once-rising technology star, Sun Microsystems. (It has since been absorbed by Oracle.)
Facebook has kept some of the original doors. They are meant to be a reminder to the staff. – (New York Times)