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Thursday, May 31, 2012

Facebook's mobile plans matter more than share prices





In the last two weeks roughly 170,000 Britons have joined Facebook, according to marketing firm Socialbakers. That's equivalent to the population of Swansea signing up for the social network, which floated on Wall Street on May 18th.


The share price has since fallen below $30, leading to the IPO being described as the worst major flotation in a decade. The days since then have been filled with articles obsessing over the position of the stock price and asking what that says about the future of Facebook. Meanwhile, the site continues to grow and its 900 million users keep coming back.


Investor and entrepreneur Paul Kedrosky told The Atlantic magazine this week: "Confusing the trainwreck IPO with the company's fortunes is classic market myopia, getting caught up in short-term drama and forgetting what was interesting in the first place."


That's not to say there aren't legitimate concerns about Facebook's future. The countries in which growth is highest are mostly poorer, which means less profit per user for Facebook. And the social network admitted before its IPO that it had struggled to make money from mobile users, which is a problem because users are increasingly likely to use Facebook on their mobile phones.


When the New York Times reported this week that Facebook was planning a mobile phone of its own, nobody was that surprised. This is Facebook's third attempt at creating a mobile phone, according to an anonymous New York Times source, and the company has been recruiting engineers who have worked on Apple's iPhone in a bid to make the project a success this time.

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