Mobile Makes Facebook Hot Again

NEW YORK (TheStreet) -- In the last months Facebook (FB) has suddenly become a hot company again.

From its November low of $19.21 it has risen steadily to its current price of about $28.50. More important, the tone of analyst comments about it have changed. Now it's being put alongside Google ( GOOG)), Amazon.com ( AMZN) and Apple ( AAPL) when people ask, "Who will rule the Internet in 2013?"

The question, like most media questions, is a silly one. But the Facebook comeback is real. It's based on one word -- mobile.

With Apple and Google's Android system holding a virtual duopoly on the mobile space, as 9to5Google notes, Facebook has been free to focus on two full operating systems. It has done that well.

Its new Messenger app transforms it into a complete solution for combining text and voice messaging, as Jordan Kahn noted at 9to5Mac. It's moving into Voice over IP, making it more of a phone company, writes CNET. Its new user interface, displayed here at Thaeger.com, is very mobile-friendly.

The key to any business, large or small, has always been the same: Focus on doing one thing very well. Facebook was seen right after its IPO as a social media company. That's a crowded field with little stickiness, and so the smart money dismissed it. Now Facebook is being seen in a different light, as a mobile networking company. It's a better story.

Best of all, by controlling its own mobile apps, which define its mobile experience, Facebook also gets to monetize that experience. Jim Edwards of Business Insider estimates the company now has a $2 billion/year "run rate" in mobile advertising.

Mobile advertising has been a tough nut to crack and, according to analysts, Facebook has cracked it, by simply placing its whole user experience inside a mobile frame, and then selling ads against the frame.

The biggest challenge any technology company faces is creating a second act, a second hit, a second reason for being. This is the difference between the one-hit wonders and the acts that last.

To Facebook bulls, mobile advertising has become CEO Mark Zuckerberg's second act, one that will give his company a big future in mobile devices, and what was a sell in October is now a screaming buy.

I would like to believe that. It's a good story. It may turn out to be true. But something tells me Facebook's future remains no more guaranteed than it ever was. It's almost as easy to change apps as it would be to click from one Web site into another. Reputation still matters a great deal, and what was found can quickly be lost.

I still want to be from Missouri here. I still want to see Facebook's numbers at the end of this month. It's possible that, as Techcrunch notes, the company's price is being held up by the controlled way in which early shareholders are cashing out, through SecondMarket auctions, rather than simple sell orders to brokers.

As earnings hype rises, Facebook shares are selling at a PE near that of Amazon.com. I think Amazon is overpriced, too, but I trust its numbers and track record. Facebook's track record is very brief and very spotty by comparison.

So we'll see.

At the time of publication the author had positions in AAPL and GOOG.

Follow @DanaBlankenhorn

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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