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Wait a Minute! Did Facebook's Mark Zuckerberg Really Say Anything New?


Facebook CEO Mark Zuckerberg was extremely bullish on the company's mobile products at the TechCrunch Disrupt Conference.


Zuckerberg is notoriously long-term minded. He's never said anything to indicate that he cares about the company's performance quarter-to-quarter.

Of course, he has to appear positive in order to keep employee morale up and continue attracting new talent. The best and brightest don't like sinking ships.

But Zuckerberg may have screwed up by raising investor expectations too high -- a common death knell for high-flying momentum stocks.

Wall Street is all about the here and now, and it is clearly interpreting Zuckerberg's words as a reason to buy and/or cover shorts.

But on the positive side, I think Facebook bulls should be very, very excited by Zuckerberg's comments on search.

Facebook is doing 1 billion search queries per day, primarily for people, but a good deal of them pertain to "commercial behavior," as Zuckerberg describes it.

Here's the key passage, courtesy of our friends at WIred:

"Search engines are really evolving toward giving you a set of answers," Zuckerberg said. "It's not just like, 'I'll type in something and show me some relevant stuff.' It's, 'I have a specific question, answer this question for me.' When you look at it from that perspective, Facebook is pretty uniquely positioned to answer the questions people have: 'What sushi restaurants have my friends gone to in New York in the past six months and liked?' 'Which of my friends and friends of friends work at this company I'm interested in... so I can talk to them about what it's like to work there?'

"These are queries you could potentially do in Facebook if we built out the system that you couldn't do anywhere else. And at some point we'll do it... That's one obvious thing that would be interesting for us to do in the future."

This is tremendously bullish for Facebook as its dataset is perfect for delivering relevant search results to its users, who give up gobs of personal information voluntarily.

At the end of the day, I view the interview as a wash.

I love the idea of Facebook search, but I'm not as convinced as everyone else that Zuckerberg just virtually preannounced a good quarter.

And besides, if Facebook really is a growth story on the scale of an Apple or Google, there will be plenty of opportunities join the party. So what's the point of betting on one quarter simply because a CEO made some bullish comments?

Remember what happened to Netflix (NFLX) back in July? (Please see: With a Fantastically Foolish Facebook Update, Netflix Once Again Let Expectations Get Out of Control.)

The stock took a beating because Wall Street interpreted this Facebook update ((ironic, ain't it?) from Netflix CEO Reed Hastings as an indication that the company was having a great quarter.

So yeah, I can wait for Facebook to report earnings again before deciding whether to slam the buy button.

Twitter: @MichaelComeau

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