Shareholders Crave Information and Clarity from Facebook

Last month, Facebook (NASDAQ:FB) CEO Mark Zuckerberg took center stage at the TechCrunch Disrupt conference in San Francisco. It was his first media appearance since the controversial initial public offering of Facebook in May. Zuckerberg’s comments and rare insights into the monetization plan of the social media giant were enough to lift shares nearly 20 percent in only a week. On Monday, Facebook shares received another boost as shareholders continue to seek more clarity about the future of the company with over 950 million users.

Sheryl Sandberg, chief operating officer of Facebook, spoke to CNBC Monday morning in her first major media appearance since the company’s IPO. Much like Zuckerberg’s recent interview, she addressed the rapid share price decline since going public, but pointed towards positive developments coming to the company’s timeline. She explains, “We’re obviously disappointed and really surprised by what happened in the IPO.” However, she adds that Facebook has employees that are very focused on building great social products. “We are taking that energy and really focusing on proving to the world that we can continue to grow our business, continue to grow our users and their engagement, and build a great company, not just for a quarter, but hopefully for decades and decades.”

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One of the first major steps Facebook took to improving its monetization of users occurred last week. The company launched a new service called Gifts. As the name suggests, it enables users to buy, give and ship real gifts to friends directly through Facebook. Gifts can be given from the birthday reminders news feed, or from a person’s timeline. The gift giving process can be completed on Facebook’s website or on Android (NASDAQ:GOOG) mobile phones, with Apple (NASDAQ:AAPL) iPhone and iPad versions rolling out soon. Facebook receives a commission on each transaction, and will expand the service in the United States over the coming months.

During the interview, Sandberg reveals that Facebook’s mobile app is being well received among users. It is “boosting engagement” more than desktop users, as mobile users are 20 percent more likely to return to Facebook. Meanwhile, promoted posts, which are found on the desktop service as well as the mobile app, are eight times more engaging than the same post along the right side of Facebook’s website. Furthermore, 60 studies involving the impact of Facebook’s ads in the past year show that 70 percent of firms experienced a return on investment of three times or better.

Sandberg also added to Zuckerberg’s comments on search. She explains, “As Mark said, people are surprised by how much search is done on Facebook. Everyday, there is an enormous percentage of search. There’s also a promise in the market that search could become more social that we don’t think has been met. When you’re looking for information, the question is who do you want it from? Do you want it from the wisdom of crowds or do you want it from the wisdom of friends?” A search feature on Facebook providing results from friends, could help the company differentiate itself from other search companies such as Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO).

Shareholders were pleased with Sandberg’s interview and insights. Facebook’s stock price jumped more than 3 percent early Monday, but then faded lower to closer the week at $20.91 per share Friday. Looking ahead, investors are set to receive more clarity from Facebook when it reports third quarter financial results on October 23, 2012.

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