Facebook ‘Friends’ Apple and Takes a Shot at Google

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Brian Snyder / REUTERS

Facebook founder and CEO Mark Zuckerberg speaks to reporters at Harvard University in Cambridge, Massachusetts November 7, 2011.

Facebook CEO Mark Zuckerberg made it crystal clear Wednesday that the social networking juggernaut has a better working relationship with hardware giant Apple than it does with Web search leader Google. The 28-year-old billionaire said his company is working closely with Apple on applications for new mobile products. Google? Not so much.

“Our relationship with Google isn’t one where the companies really talk,” Zuckerberg told Wall Street analysts in a startling disclosure on the conference call following the company’s earnings report. By contrast, Zuckerberg spoke highly of his counterparts at Apple. “I’m really happy with the partnership we have with them,” he said.

With those comments, Zuckerberg laid down a marker in the escalating battle for Internet advantage between Facebook, Apple, and Google. The chips are now on the table; the war is on. Facebook recently launched a heavily-publicized new search product, which could pit the company against search leader Google. Facebook has over one billion users worldwide, but it hasn’t figured out how to make money off those users as effectively as Google has done with its search engine.

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Facebook delivered a strong earnings report, especially in the crucial mobile space. In one year, the company has increased mobile revenue as a percentage of total revenue from 0% — nothing — to 23%. “Today there is no argument,” Zuckerberg told Wall Street analysts. “Facebook is a mobile company.”

There was some drama immediately following the close of the market as Facebook’s stock price plunged 10% — wiping out billions of dollars in shareholder value in a matter of seconds. Minutes later, Facebook’s stock recovered its losses, climbing back above $30 per share. This game is not for the faint of heart.

Facebook’s ad revenue in the fourth quarter grew 41% to $1.3 billion. The company’s overall fourth-quarter revenue was $1.6 billion, versus $1.1 billion one year ago. That topped analyst estimates. “It was a solid [fourth quarter] beat as daily mobile users outnumbered desktop users for the first time ever,” Jeffries’ analyst Brian Pitz wrote in a note to clients.

Mobile device advertising revenue is rapidly becoming the most important consumer Internet metric as the tech industry undergoes a profound structural shift thanks to the explosive growth of sophisticated smartphones like Apple’s iPhone and Google’s Android devices. Consumers are increasingly accessing the Internet on mobile devices as the locus of computing shifts away from the desktop and toward smartphones and tablets.

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Despite the solid earnings report, Facebook is still dealing with the fallout from last year’s controversial IPO. The offering was supposed to be a triumphant moment for Silicon Valley and Wall Street. Instead, between trading glitches on the NASDAQ exchange, accusations of “selective disclosure” against Facebook’s bankers, and an offering level that was clearly mispriced, the episode turned into a major debacle.

After going public at $38 per share, Facebook’s stock price quickly plunged to about $20. The company and its bankers face multiple lawsuits from irate investors. The Securities and Exchange Commission has so far found no evidence of wrongdoing, although the investigation is continuing.

Facebook still has a ton of work to do, but Wednesday’s solid results indicate that the company is making progress with its strategy to generate revenue from mobile advertising, which is the next great tech battlefield in the war for Internet supremacy.

Wall Street analysts offered cautious praise for Facebook’s latest performance. “Quarterly results may be choppy as Facebook optimizes for the long term, but we continue to believe that Facebook is in the early stages of transitioning its ad platform to better targeted social and mobile ads that will become increasingly valuable to advertisers,” JPMorgan’s Doug Amnuth wrote in a note to clients. “We would be buying any near-term weakness in Facebook shares.”

After a tumultuous year, Facebook seems to be finding its footing, and Wall Street is taking notice. “The quarter was a little like a cold shower after you’ve been out all night — it’s something that makes you sober up very quickly,” Jordan Rohan, an analyst at Stifel Nicolaus, told the New York Times. He said the company’s results make it clear that Facebook intends to spend more “to go after the opportunities before them.”

19 comments
clickonflick
clickonflick

well, i think this really doesn't affect google much, as Google is already a giant

mark zuckerberg should not forget that facebook is only accesible when people type and search for "facebook' in Google and same goes for Apple , lol

PaulDirks
PaulDirks

Here's the difference. I actually pay Google out of my own pocket for services rendered. Apple? Facebook? Not so much. 


HarryAllan
HarryAllan

Do not want to disrespect magicians of our day....your great...but......sorry..my name is Harry, hahaha

HarryAllan
HarryAllan

There is one question that boggles this mind...that I assure you is not faint of Heart....how does one lose one day millions just to recuperate millions and...so called...millions back with out.....well........???????????  Are you a financial wizard or a tech tech wiz Mr. Zuckerberg??????  I thought Houdini was the one that made the impossible , possible.  That dumbfounds me the most!!!


HarryAllan
HarryAllan

Sorry Mr Gustin, wanted to say but by my....


HarryAllan
HarryAllan

I will not say that I do not use FaceBook!  The only reason I use it is to keep in touch with the only family I have lef5t....MY  CHILDREN!!!

HarryAllan
HarryAllan

A cold shower never made me sober up at all!!!!!  Comments such as what I read before (not on your behalf Mr. Gustin) also by my counterparts make me sober.

Clint.Bushman
Clint.Bushman

One Billion accounts is far different that one Billion users.

Nearly half of facebook accounts are dupes to cheat at farmville or to have an account your grandma does not follow.

this may explain way facebook advertising is curiously ineffective and bordering on fraud.

AmbroseMack
AmbroseMack

Duh!!  Why would FB want to partner with Google?  OR Better Yet---Why would Google be even interested in discussions with FB---there is no value to Google.  The "Billion" users are mostly vapor. I myself have 3 FB accounts and seldom ever log in to any of them. Google is a decade ahead in technology over FB. In my humble opinion,  FB fans (as well as Apple users are intoxicated with their own Koolaid.  Even Google will run out of great ideas some day!   For the time being--- Google does not need anything from FB.

_vinr
_vinr

Well, sure, because Apple has no Apple+. Suckerbag and his minions are scared, Google+ is catching up.

AppToday
AppToday

It is only logical.  Facebook and Apple are not competing with each other.  Google bought Android to compete with iPhone, started Google+ to compete with Facebook.

DerpsleyHerpington
DerpsleyHerpington

Two companies that are slowly losing their ignorant horde following. Facebook and Apple. Too bad Facebook will be old news in a few years time. Apple will probably take another 10 years to fully dissolve into nothingness.

kandw101
kandw101

Aw lookie, someone trying to help the little apple out. How sweet!

cacrimeba
cacrimeba

@clickonflick it shouldnt be to difficult to type www.facebook.com or www.apple.com same way u do www.google.com

HarryAllan
HarryAllan

It is a shame that we still have this debate about Windows and Apple..knowing..if you do know..that they are two figures of ICONIC stature in today's industry, and, that they will never go away!!!  Don't what to say more bout it...DerpHerp/kandw101.  Maybe we should go back to original coding and see who came really came up with the first original idea....we maybe along time coming!!!!!!!!!!