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TheStreet Open House

Facebook: New and Improved One Year Later

NEW YORK ( TheStreet) -- "What a difference a day makes," goes the old song. When it comes to the Big Kahuna of social networking I'd like to write a song called "What a Difference a Year Makes."

It's been 12 schizophrenic months for Facebook (FB) since its fateful debut as a publicly traded company. Who can forget that day in May 2012 when its IPO, priced at $38 a share, was met with technical snafus and allegations of questionable disclosures resulting in the shares ending the day with a loss?

As of the close on Friday, the share price, at $26.25, is still nearly $13 below the IPO price. Its three-month average daily volume has grown to over 38 million shares and it trades at a forward (one-year) PE of 33.

But today Facebook has a new focus and is on track for "...a success unexpected in common hours," as Henry David Thoreau expressed it.

CEO and social networking icon Mark Zuckerberg, having taken responsibility for FB's unsavory first year as a listed stock on the Nasdaq, has shifted gears to making his company a dominant player in the world of mobile devices. By the way, if you still haven't seen the movie "Social Network," put it at the top of your movie queue.

Back around October 2012 Zuckerberg saw the light about the glaring misdirection of FB's efforts to build a web-centric platform and mediocre applications. The one sold at Apple's (AAPL) "App Store" turned out to be as popular as a roach crawling across a freshly delivered pizza.


"It's probably one of the biggest mistakes we've ever made" Zuckerberg told Fortune Magazine's Jessi Hempel during an interview in late March 2013 at Facebook's Menlo Park, Calif., headquarters. FB's CEO was bound and determined to correct this mistake so his company could change its luck, and he did it!

As the world's usage of technology shifted from desktops and laptop computers to mobile devices, Zuckerberg and Chief Technology Officer Mike Schroepfer finally realized FB was going the wrong direction. They knew they had to shift by first finding more mobile device engineers.

They also had to focus on apps in a big way. Then the FB mobile device initiative would have to pick just one operating system to powerfully demonstrate its creativity and adaptability within the mobile space. By early April Zuckerberg introduced Facebook Home, which is a new application which uses software specifically made to accommodate Google's (GOOG) popular Android devices.

There's no better way for me to describe Facebook Home than to borrow the company's own description of it: "Facebook Home puts your friends at the heart of your phone. Replace your standard home screen with a steady stream of friends' posts and photos. Get to apps with one swipe -- just drag your profile picture up to open the app launcher. And when you download Facebook Messenger, you can keep chatting with friends when you're using other apps."

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