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Zuckerberg: People aren't seeing how good mobile is for us

During first post IPO live interview, Facebook's CEO also says the bet on HTML 5 apps was the company's biggest strategic mistake -- and that he's learned from it.

Facebook expects its mobile efforts to "make a lot more money than we make on desktop," CEO Mark Zuckerberg told the audience at TechCrunch Disrupt today.

In his first comments since Facebook's initial public offering, the Facebook founder said the company's performance on mobile devices has been underestimated. In the past six months, the company has begun inserting ads into the mobile news feed, announced a significant integration with Apple devices, and improved its application for iOS devices.

"One of the main things that I think is misunderstood is how fundamentally good it is on a bunch of different levels," Zuckerberg said of Facebook's approach to mobile.

Mark Zuckerberg said Tuesday that Facebook "is now a mobile company."
Mark Zuckerberg said Tuesday that Facebook "is now a mobile company." James Martin / CNET

But mobile has also been the cause of Facebook's biggest strategic mistake, he said: betting that apps built in HTML 5 would perform better than natively written apps. Two years ago, Facebook decided to build all of its mobile apps in HTML 5, an effort known as "FaceWeb." But after six to eight months of building, and four months of monitoring its performance, the company reluctantly concluded that HTML 5 apps did not perform strongly enough.

"I think the biggest mistake we made as a company was betting too much on HTML 5 as opposed to native," he said.

The company then re-focused around building native apps, culminating in the release of the new iOS app next month. A new Android app is now in development, he said.

Mobile users spend more time inside the app and are more likely to use Facebook than desktop users, Zuckerberg said, without providing specific numbers. He also said that users are looking at "double" the number of stories on the recently refreshed iOS app than they were before the update was released last month.

Without releasing specifics, he said his team is now building new ways to monetize mobile usage. And already, he said mobile ads are performing better than the desktop ads.

Questions about Facebook's mobile strategy have dogged the company since at least May, when the prospectus for its initial public offering revealed the company did not generate "meaningful revenue" from mobile advertising. That proved to be a red flag for many investors, given the fact that more than half of Facebook's 900 million users access the site via a mobile device daily.

To increase revenue from mobile devices, Facebook has been inserting advertising into the news feed more aggressively.
To increase revenue from mobile devices, Facebook has been inserting advertising into the news feed more aggressively.

In its first earnings report since becoming a public company, Facebook CFO David Ebersman said that overall ad impressions had decreased due to increased use of mobile devices. More than 543 million people accessed Facebook via mobile as of June 30, an increase of 67 percent on the year.

But the company says its mobile efforts are picking up steam. Last month, Facebook released the well-received update to its notoriously laggy iOS app, making it significantly faster in loading the news feed. The company is also aggressively inserting "sponsored stories" into the feed, allowing advertisers to promote their pages and apps using social connections.

By the end of July, of the $1 million a day in revenue Facebook was generating from sponsored stories in the news feed, about half was coming from mobile devices, the company said. And a recent study from AdParlor, which handles Facebook ad campaigns for large companies, showed that users tend to interact more with mobile ads than is often said.

Facebook isn't the only Web company struggling to make money off mobile devices. In a presentation at the All Things D conference in May, Internet trends analyst Mary Meeker said that companies including Zynga, Pandora and Tencent were generating up to five times less revenue per mobile user than they were for desktop users. But Meeker predicted that number would shift in favor of mobile revenue as the penetration of smartphones and tablets increases, and advertising dollars follow users onto their devices.

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