One Year After IPO, Facebook’s Biggest Bets Could Take a Long Time to Pay Off

Today marks a year since Facebook’s rough-and-tumble IPO.

Since that disappointing day, Facebook has gone to great lengths to assure Wall Street that yes, it will one day be the social ad spinning, money-making machine that Wall Street hopes it will be.

The biggest potential, Facebook maintains, lies in what executives consider “long-term investments,” products with grand ambitions to change the way we interact with Facebook — if not the world — on a regular basis.

Therein lies the problem. Meaningful change won’t happen soon.

Consider Facebook Home, the mobile project years in the making that aims to shift the way we interact with our mobile devices, anchoring users within the Facebook experience. The potential for success with Home, if widely adopted, could be big. More time spent inside of Facebook’s products means more ads served by default — especially when Facebook finally brings ads to Cover Feed, one of the key features of Home.

And yet by many measures, Home has stumbled hard directly out of the gate. More than half of its user reviews on Google Play are scathing. And as of last week, just over one million people had installed the product, a trifling amount compared to the 1.1 billion users on Facebook’s network.

What Facebook really wants from Home is to catch on overseas. Create a mobile-focused product to capture developing world markets — where the phone is a person’s primary computing device — and you’ve got potential to spur growth. Home, however, runs only on certain higher-end Android devices, hardware that won’t be ubiquitous or cheap in developing countries for at least a few years.

Home isn’t the only long-term bet. Look at Graph Search, Facebook’s search product rolled out earlier this year. Almost immediately came calls saying “watch out Google!” from the public. Perhaps Google’s stranglehold on the search market could be upset by a social form of discovery.

But Graph Search is possibly in an even more nascent phase than Facebook Home; Graph Search has only been rolled out to a select amount of users, and Facebook has oodles of work to do if it wants to curb the way people make Web search queries and focus them on people, places and things inside of the Facebook network.

Granted, Facebook has made serious moves in the past year to spur profitability further, releasing a slew of new ad products, revamping its gaming platform partner ecosystem and pushing, however slowly, into online retail with Facebook Gifts. It has consistently hit its numbers in the company’s quarterly earnings calls. And as the Wall Street Journal’s Evelyn Rusli wrote, the company made significant internal shifts over the past year that have made more teams responsible for Facebook’s revenue.

And still, the needle hardly moves on Facebook’s stock ticker; it closed at around $26 per share on Friday, well below the $38 it opened at one year ago. For all of Facebook’s long-term posturing, the Street remains cautious.

“We don’t build services to make money,” CEO Mark Zuckerberg wrote in his company’s S-1 prospectus before Facebook’s Nasdaq debut. “We make money to build better services.”

Hopefully, for the sake of the shareholders, Facebook can do both.