Facebook climbs as CEO says he’s addressing mobile missteps

‘Communications Tool’

‘Facebook is not a media consumption service, it is first and foremost a communications tool,’’ said Greenfield. “If your phone call, IM or iChat were disrupted by ads you would never tolerate it. Facebook users did not mind advertising on desktop because it could be ignored.”

Zuckerberg said Facebook is taking steps to strengthen search capabilities. The company is fielding about a billion search queries a day.

“We have a team working on search,” said Zuckerberg, who was interviewed by Michael Arrington, a venture capitalist and the founder of the TechCrunch technology blog. “Search engines are really evolving towards giving you a set of answers.”

Zuckerberg also said Instagram, the mobile photo-sharing service recently acquired by Facebook, has more than 100 million registered users. Facebook wants to help Instagram, which cost the company about $740 million in cash and stock, to grow to hundreds of millions of users, he said.

Facebook, which hasn’t closed above the $38 IPO price since its first trading day, reported in July that second-quarter sales increased 32 percent, down from 45 percent in the previous three months. Facebook rose to as high as $20.36 in late U.S. trading yesterday after earlier adding 3.3 percent to $19.43 at the close.

The share-price performance has been “disappointing” and it “doesn’t help” in terms of employee morale, Zuckerberg said.

Still, Zuckerberg would rather Facebook be underestimated rather than lavished with praise, he said. That gives the company flexibility to make big bets on the future.

“Sure, maybe some people will leave,” he said. “But I think it’s a great time for people to join and a great time for people to stay and double down.”

Bloomberg News

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