Wall Street Waits for Mark Zuckerberg’s Call
Yes, the expected attention will rest on the company’s admitted weaknesses: Facebook’s young advertising business faces stiff challenges as consumers flock from desktop to mobile. Also looming is Facebook’s symbiotic relationship with Zynga.
But a more persistent question remains: It’s not about Facebook’s balance sheet, but its CEO and his relationship status with Wall Street.
To this point, Mark Zuckerberg has made it abundantly clear: He couldn’t care less what the Street thinks of him. He only appeared at some, not all investment bank stops during the company’s IPO road show, much of the time clad in a hoodie (gasp!). His focus is the product and strategy of the company, and he lets lieutenants like Sheryl Sandberg and David Ebersman deal with investors.
“We don’t build services to make money,” Zuckerberg wrote in his founder’s letter last February. “We make money to build better services.”
So how, then, will Zuckerberg deal with the rigmarole of quarterly earnings, the needling of analysts?
It is possible — though not probable, I’d bet — that he’ll pull a no-show the first time around. When I asked whether or not Zuckerberg would be on the call, Facebook had no comment.
More likely: He’ll pull a flyby, akin to the likes of Larry Page’s first earnings call as CEO — though (hopefully) better executed.
Think back to when Page first took the reins, a little more than a year ago. Instead of leading the call, Google scripted an awkwardly staged Larry drop-in at the beginning, with Page essentially reading from a list of Google’s quarterly accomplishments and then bailing. He handed his Q&A duties off to Patrick Pichette — the practiced, well-spoken Google CFO — instead of sticking around.
Since then, Page has grudgingly agreed to stay for the whole thing — when he can — but expects his deputies to handle most of the call’s formalities, and Wall Street now seems okay with that. I think Zuckerberg will use the same script, and will ask Sandberg and Ebersman to carry most of the load, as they did in the months leading up to the company’s Nasdaq debut.
Still, despite delegating those concerns to his colleagues, investors will still want to hear from the man at the top, the one who has the greatest insight into long-term strategy.
Zuckerberg can speak to potential retention problems, for instance, especially in the wake of his deputy and CTO Bret Taylor leaving the company to work on his own start-up. And he could broadly sketch Facebook’s M&A strategy, following up on the dozen or so acquisitions the company has already completed this year, while giving guidance as to what’s on its shopping list — especially with a fat $16 billion burning a hole in its pocket after the IPO.