Facebook has been under enormous scrutiny of late. Of course, there are those who track the site ferociously, either as ultra-keen Facebook members or as journalists who have been assigned the Facebook “beat”. Then, there is the investing world, which has both favoured and shunned the company’s stock since it became a publicly traded asset. On May 18, when the stock went public, one share cost $38.23; last night, it closed at $20.40.

Companies that lose half their value in the stock market in six months tend to be loved or hated, intensely. But, from where I sit, the key question is this: does Facebook have a future?

On the plus side, it certainly seems positive when its CEO founder Mark Zuckerberg reported October 4, “This morning, there are more than one billion people using Facebook actively each month.” On the minus side, the #1 reason why the stock is not doing better than it is can be explained with one verb: monetise, which means, per the dictionary: “convert into or express in the form of currency.” In other words, Facebook, to succeed, is going to have to convert those one billion people into bottom-line profits. BIG and consistent bottom-line profits.

I’ve been following Facebook for some time; when TV interviewer Charlie Rose interviewed Facebook’s Chief Operating Officer Sheryl Sandberg and board member Marc Andreessen (who was the creator of the first Web browser, along with many other achievements), I took special interest in finding out how optimistic they were about monetising Facebook’s potential. The interview was part of Interactive Advertising Bureau’s MIXX conference for online ads and was reported by Forbe’s Robert Hof, who also included some of the transcribed comments from the interview.

You might draw different conclusions from mine after you read the original comments, but I found Sandberg and Andreessen to be honest as they tried to nextsense how Facebook could become an Internet juggernaut as big as say, Apple or Google. For examples:

  • Andreessen notes how a lot of advertising dollars are still trapped in mainstream-media buys, less in newspapers (of course) and more so in television and radio. However, Adreessen says money is now moving vigorously into mobile advertising.
  • Sandberg expanded on that thought: “You went from radio to TV and print and then to online. We think Facebook represents the next stage of online and we’re still in the very beginning. Ads online today are one-time and one-way, no ongoing relationship. We’re at the very beginning of changing that. Businesses have an opportunity to change their relationships. They can establish an ongoing relationship. And members have 130 friends they can pass messages along to.”
  • Rose asked a critical question, which is how Facebook can prove to advertisers that their message is reaching many multiples of Facebook users, based on just one seeing a powerful ad. Said Sandberg: “We prove it with data. One question has been, do people see the ads. Our brand awareness is 30 per cent higher than other ads. It’s not just that people see the ads, we also ring the cash register. We’ve done 60 studies on sales. 70 per cent of campaigns have a 3X payback.”

It seems that these two senior Facebook leaders believe the missing “m-word” (monetising) will be realised by leveraging another powerful m-word: mobile. In my next post, I’ll talk about their thoughts on e-mobility as well as a few of my own.