3 things to watch for in Facebook’s earnings

FORTUNE — Facebook will face a tough audience when the company reports its first quarter earnings on Thursday. After a theatrically disastrous initial public offering in May, the Menlo Park, Calif-based social network must now show Wall Street it can continue to grow both users and revenue at a brisk pace and has the discipline to deliver strong profits quarter after quarter to keep investors committed.

So far, it’s been a rough ride. The stock has been trading at around $29 this week — a 24% drop from the price at which it closed on its first day — as investors question the strength of its advertising business and fret over how the company will make money on mobile platforms. Here are three things to keep in mind for Thursday’s 5PM EST earnings call:

The Cast
There’s no doubt that Facebook (FBCFO David Ebersman will play a lead role on the call. Facebook COO Sheryl Sandberg, who recently joined the company’s board, is also expected to speak. The focus will be on whether founder Mark Zuckerberg joins the call, and what he chooses to contribute.

Zuckerberg began his letter to potential shareholders last winter by explaining that Facebook was not originally created to be a company. “It was built to accomplish a social mission to make the world more open and connected,” he wrote. Many investors have fretted that such pronouncements suggests that Zuck, who has absolute control over the company through his majority of the voting shares, is not focused on delivering profits. Therefore, his presence alone will send a signal to analysts that Zuckerberg takes profit-making seriously, and any comments will be carefully parsed.  Read More


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A Revolution in Social Networking

Posted on July 25, 2012, in #social media, #technology and tagged , , , , , , , , , . Bookmark the permalink. Leave a comment.


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