Mystery shrouds Facebook ‘event’
By San Jose Mercury News
Published: Tuesday, January 15, 2013, 12:01 a.m.
Updated: Tuesday, February 19, 2013
Riding high on a recent wave of upbeat financial indicators, Facebook Inc. invited the media to report on a mysterious event at its headquarters on Tuesday, sparking a surge of rumors about the social networking company's plans.
Speculation has ranged from a Frank Gehry-designed engineering building to plans for a Facebook-branded smartphone, all based on the company's invitation to reporters, which teased: “Come see what we're building.”
While Facebook isn't commenting, several analysts who follow the company are discounting the smartphone rumors and say it's more likely Facebook will introduce a consumer-oriented mobile service — perhaps a search engine that would combine friends' suggestions and other information, which would be a major challenge to Facebook's much larger rival, Google Inc.
Also possible, according to some analysts, are advertising products and tools that would help advertisers measure the effectiveness of delivering personalized messages to Facebook users, especially on mobile devices.
After sinking below $18 in September, Facebook stock has surged in recent months, as the company initiated new advertising products and reported it was achieving good progress in building its mobile ad business. CEO Mark Zuckerberg has said Facebook's mobile platform is his top priority, as research shows a majority of the network's 1 billion active members use Facebook on their smartphones and tablets.
Since the new year began, Facebook shares have risen above $30 for the first time in six months, sparking hopes the stock might return to the level of its $38 initial public offering price in 2013. The surge has continued since Facebook announced Tuesday's event, although the stock fell 77 cents to $30.95 on Monday as some investors sold in advance of the news.
Most analysts are expecting Facebook to report a strong performance during its December quarter, with revenue nearing $1.52 billion, when the company releases numbers Jan. 30.
“The main reason the stock is doing well is renewed faith in the company's ability to transition to mobile and in its efforts to monetize that transition,” Sterne Agee financial analyst Arvind Bhatia said Monday.
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