Facebook Inc. (NASDAQ:FB) is having a well-known revenue and image crisis. The company has had a well-traveled, precipitous drop in the value of the stock since the IPO and the frank acknowledgement by CEO Mark Zuckerberg that the company is not in the business to make money, it is in the business to create services that make money so it can create more services. Those are anything but music to the ears of investors who otherwise would consider putting their money into the stock of a culturally transformative company.
The biggest challenge, at least in terms of coverage by the media, for Facebook Inc. (NASDAQ:FB) is the company’s reach on mobile devices and how to monetize that. Facebook’s presence and usability has grown far more dramatically in the mobile area that in the desktop niche where the company got its foothold. With society being more mobile and being able to take the Internet with them on smartphones, Facebook has seen users access its Web site far more often from smartphones and tablets, but the company has had a huge shortcoming in terms of making mobile revenue stream for the company because it is a different format than what is seen on a desktop computer monitor. So it does seem interesting that with the challenges facing it and yet the success that Facebook has had on desktops, that the company would call itself “mobile first.”
One recent article digs into this phraseology, and considers that “mobile first” may simple just mean that Facebook Inc. (NASDAQ:FB) is making the monetizing of mobile for Facebook the first priority in all of its current research and development. Though the company is about building services, it’s clear that the company is feeling a need to pivot a little bit to provide investors with some comfort that the company will be able to create a reliable revenue stream to go along with its omnipresence n the culture. To its credit, the company does recognize that mobile is where the growth will be – exponential growth, if Zuckerberg is even half right in his prediction that there will be 5 billion smartphones in the market in the next five years – and thus, in order to ride the wave all the way into the beach, Facebook has to be in position before the wave comes. \
But with a company like Facebook, the word revenue comes with another word attached – advertising. That will ultimately be what determines the long-term future of Facebook Inc. (NASDAQ:FB) as a stock and as an investable company. With so much to lose, it might be safe to say that Facebook, which has already revolutionized how the world communicates, will likely be the source for the innovation in mobile revenue. It may have no choice but to innovate. Investors like billionaire George Soros have faith that it will happen.