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Facebook's first earnings report wasn't disappointing. But a big question about its mobile growth prospects is dogging the company.
Facebook reported earnings for the first time today as a public company and, as expected, it mostly met Wall Street's expectations, earning $0.12 per share. But that didn't matter much, as the stock still got crushed in after-hours trading, diving well below its $38/share IPO offering price. How could this be, on a day when the markets rallied on news that the European Central Bank will — wink, wink — not allow the euro to fail, according ECB President Mario Draghi?
I listened to Facebook's earnings call, which feature CEO mark Zuckerberg in additional to COO Sheryl Sandberg and CFO David Ebersman — he of the botched IPO — in speaking roles. The focus of the call was mobile, mobile, mobile. Facebook has almost a billion PC users and half a billion mobile users. And it's to this latter group that Wall Street is now looking for growth. Unfortunately, Facebook just isn't there yet on developing an ad platform for the mobile environment. And it may not get there for a while.
It's clear that Facebook needs to answer this mobile-growth question and answer it both soon and robustly. If it doesn't, Facebook could go from being just another technology company with bank analysts breathing down its neck every quarter to a tech company that's actually failing, its growth tapped out — hard as that may be to wrap your head around.
I live-tweeted the call. And then turned it into a Storify. Enjoy!