Inside Scoop: Facebook's earnings and plans for next quarter
Hi, everyone and welcome to the Inside Scoop.
I'm CNET's Kara Tsuboi joined by Paul Sloan, executive editor.
-We're talking about Facebook earnings report.
The numbers came out today and they're pretty good.
-Yeah, that was fourth quarter.
They showed a lot of growth.
They showed real strength in mobile 23 percent of their ad revenue is now coming from mobile, which huge.
Everything was really strong.
The investors are ho-hum about it because stocks have not been up quite a bit in the last few months.
And to get there, Facebook has been spending a lot more money.
-So, to get their ad revenue up 23 percent from mobile, what have they done differently in the last couple of months?
-Well, basically, starting last spring, they introduced what's called sponsored stories which are their mobile ads, ads that come right in your newsfeed.
-And the big surprise is they just said on the conference call was that this worked.
They're not angry and users, people don't mind them and they're very - they kept stressing how powerful they are because they have your real identity.
They have people who want to be there.
This is not seen as intrusive.
-And if they --when they get the balance right.
and they stressed they're really in the early days, these ads convert - to use the ad lingo very well.
-People are clicking through.
Now, Facebook also rolled out a couple of other new products in the last few months, like gifts and the search.
-Has that have much of an impact on numbers?
-You know, gifts, they wouldn't say anything.
They'd said it's tiny, tiny.
They hinted that's -you know, the revenue.
And they hinted that there's a lot of tweaking going on with the product.
-They got pressed on this a bit and said, "We're just gonna have to figure out the right mix." But they're optimistic that it will grow into something
but they didn't give any timeframe.
Search, of course, they just rolled out this quarter.
-And this is a big, you know, Mark Zuckerberg's favorite project right now.
He talks about something like a trillion things and shares and those across Facebook and he sees this as a huge opportunity to create a product that's unlike any kind of web search which is social search, which is, you know, they call it graph search.
But it's way too early to tell.
It's only been rolled out to, maybe, tens of thousands of people.
We'll see that in future portals, of course.
-What would you say the company really needs
to do moving forward to continue this upward trajectory of the stock price?
-I think it's more the same.
I mean, look, they're still at $31.
They're still way far below their $38 IPO offering price.
-The last few months have been very optimistic and they are on the right trajectory but they just have to keep going and showing that their mobile ads work.
You know, keep making their products work better and better and just make that balance work and hopefully, some of these revenue will start to improve from other products such as gifts.
-And finally, you know, with all this talk of mobile, I heard that Zuckerberg finally squashed the rumors of a Facebook phone.
That's just not gonna happen.
-Well, he's actually squashed these rumors
-a couple of times.
But he wasn't even asked directly today but he just came out and said, "We are not gonna make a phone," look, to him, it just doesn't make sense - why make the device.
I mean, they want to be on all the platforms.
They don't want to be - it just doesn't make sense.
They want to have a deep relationship through Android, through iOS and through mobile web.
-He didn't talk about the other smaller platforms out there but he just once again dismissed that.
"Why crossover the hardware, we're doing well enough as it is."
-It is just not logical for them.
Thank you so much Paul Sloan, executive editor.
I'm Kara Tsuboi.
Thanks for watching the Inside Scoop.