From my Forbes.com blog The New Persuaders:
Facebook CEO Mark Zuckerberg hasn’t said much, if anything, publicly since the No. 1 social network went public in May. But oh, how much has changed since that day. Not only did the IPO fall flat, but Facebook is now dogged by slower growth perhaps partly due to its late start on mobile advertising.
Today, Zuckerberg went public himself at the TechCrunch Disrupt conference in San Francisco. Clearly the big “get” for the conference, Zuckerberg was in his element at the conference, which is aimed at tech startups and the software developers creating them. In a wide-ranging and surprisingly revealing interview with TechCrunch founder Mike Arrington, who has since become a venture capitalist, Zuckerberg said Facebook lost two years betting on mobile Web technology instead of native iPhone apps but said he thinks mobile will be even bigger than the Web for Facebook in terms of advertising.
Investors liked what they heard. Facebook shares rose 3.6% in after-hours trading, breaking $20 a share, on top of a 3.3% rise on Tuesday before his talk.
Here’s the interview, edited slightly for clarity and my inability to catch every single word the fast-talking Zuckerberg utters:
Q: You went public on May 18 and the stock has lost roughly half its value.
A: Just get right into it!
Q: Would you have done anything differently on the IPO?
A: The performance of the stock has obviously been disappointing. But the commitment we made was to fulfill this mission to make the world more open and connected.
The key will be how we do with mobile. A lot of stuff has changed in six months since we’ve been in the quiet period.
Literally six months ago, we didn’t run a single ad on mobile. So people can underestimate how good mobile can be for us. It’s the main thing that’s fundamentally misunderstood. For one, there’s just more mobile users–5 billion people have cellphones in the world. Second, they’re spending more time on it. We’re already seeing people more likely to be daily active users on mobile. And those stats are before the new iOS app. And third, we can have better advertising on mobile, make more money.
Q: You make money to build great services rather than build services to make money. Do you really mean that?
A: We are a mission-driven company. In order to do this, we have to build a great team. And in order to do that, you need people to know they can make a bunch of money. So we need a business model to make a lot of money.
Building a mission and building a business go hand in hand. The primary thing that excites me is the mission. But we have always had a healthy understanding that we need to do both.
Q: What about the stock causing morale problems?
A: Well, it doesn’t help. But first, Facebook has not been an uncontroversial company in the past. So people are fairly used to the press saying good things about us and bad things about us.
What really motivates people at Facebook is building something that’s worthwhile, that they’re going to be proud to show to friends and family.
We also haven’t done much on equity to incentivize people. The way we do compensation is we translate the amount of compensation we give you into shares. [So employees get more shares if the stock price is down, thus similar compensation, thus the stock price doesn't mean as much as it might appear.]
Q: I’ve been rough on the company on mobile products.
A: We were very self-critical too.
Q: Is mobile a strength or weakness for Facebook?
A: There are more users, they spend more time on Facebook, and we’re going to make more money on mobile ads. There are huge things we can do to move the needle. Mobile is a lot closer to TV than [to] the desktop. We’ve had right-hand-column ads and it’s been great, a multi-billion-dollar business.
But on mobile, we can’t do that. It’s clearly going to have to be different. We’re seeing some great mobile ad products being developed. There’s a huge opportunity. The question is getting there.
Clearly we’ve had a bunch of missteps there. The biggest mistake we made as a company was betting too much on HTML5, because it’s just not there yet. We went for this approach, an internal framework called Faceweb. We just couldn’t translate it to mobile with the quality we wanted.
We had to start over and rewrite everything to be native. We burned two years. It may turn out it was one of the biggest if not the biggest strategic mistake we made.
Two years ago, we decided to bet completely on HTML5. We believed that because it used the same technology as the desktop, we thought it could improve. But it wasn’t good enough. We realized the only way we could get there was to go native.
Q: Did you realize the previous Facebook mobile app sucked?
A: Yeah, it was not where we wanted it to be. We just decided to ship the same features as before, but faster. But in parallel, other teams have been building new features. Over the coming weeks and months, we can expect to see a lot of the cool stuff. …
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