 Good morning, I'm Kristen Filetti and welcome to Newsdust on SiliconANGLE TV for Wednesday, June 12, 2013. Facebook's first annual Shareholders' Meeting took place yesterday, and tensions were running high. Join us now to comment on how things unfolded and how Facebook responded. Is SiliconANGLE contributing editor, John Casaretto? Good morning, John. Good to have you. Good morning. Facebook CEO Mark Zuckerberg faced an angry mob of shareholders yesterday during the company's first annual Shareholders' Meeting, due to a Facebook stock valuation nearly 40 percent below the price of last year's initial public offering. Zuckerberg first defended the company's business model and several of its recent decisions, saying the stock price hasn't affected his roadmap for Facebook, and that nothing in that has made him think that the fundamental strategy is wrong. So John, what did Zuckerberg describe as signs of strength across Facebook's business? Well, he's certainly under a lot of fire. It's a heck of a way to kick off your first, your inaugural public meeting like that. But he did lean on a number of things. He said that there were a number of signs of strength across Facebook's business, particularly in mobile, where he said about 30 percent of its sales are now coming from mobile ads. One of the things that he did do was, of course, he defended the company's business model, as you said, and a bunch of its recent decisions. So some of those changes leaned on the mobile apps and the new ad products, and really that's really where they're focusing most of their strengths right now and trying to rely on those aspects of what Facebook brings to the table to its stockholders and people that they're accountable to. So did the company respond with a clear plan of action for getting the stock back on track? Unfortunately, no. Actually, their chief financial officer was out there, and he said that, you know, really not really some strong words, but what it was is that he came out and he said that they didn't really know what the future was going to bring, but it was committed to the future. So he said that the future was going to bring the stock back on track. The future was going to bring, but it was committed to making Facebook a valuable company that he'd been asked by one shareholder. What do you think another two years might look like? He says, I wish I had a crystal ball. Zuckerberg says that he spends a lot of his days reviewing products at every stage, including advertising products, and he's actively engaged in these things. So the bottom line is the story is it's not solid or confidence boosting. It's not real clear. And I think that a lot of people are looking at that and going, you know, we're not real sure what's going on. There is no plan of action. As you just mentioned, Zuckerberg said he's actively engaged in coming up with money making ideas. And to quote him, he said, I'm very well versed in our advertising business. So what are your thoughts on Facebook's monetization efforts? Are they on the right track or do they need a fresh approach in your opinion? Yeah, that was a very interesting quote. As far as coming up with money making ideas, I think I spent a lot of my youth trying to think of things like that. Here's what they're facing. For all the monetization efforts that they're trying here, they got to deal with a bunch of realities here. From the outside it looks like they're trying to throw iterations of different advertising platforms against the wall to see what sticks. And that's not really market research. It's really not, you know, refining anything. It's pretty much poking in the dark. And, you know, my feelings are that while Facebook advertising is something that can work, it hasn't thus far. And it hasn't really figured out that magic formula. And it's because it appears that Facebook doesn't really have a firm grip or plan on what it's doing or an end game in sight. In the way that Zuckerberg and shareholders were dealing, excuse me, Zuckerberg and the execs were dealing with the shareholders. Do you think that's evident that, you know, this is their first time around having such a meeting and that they are still new to this? I think that's possibly a part of it. I think that, you know, we don't know how this will end up. But, you know, you've gone from a company that has grown from, you know, this small company and, you know, grown and exploded and had all this buzz and now it's, you know, got to face the big boys on Wall Street. And this might be just be some growing pains on the surface that could be an issue. But, you know, some of the underlying things, you know, in terms of the profits and, you know, the things that drive these things in these reports quarter to quarter, you know, maybe they didn't get the best advice. Perhaps they weren't ready. It's going to be a lot of people, you know, with these opinions all over the place. Clearly, they've got an issue here laying out their plan for the future. And I think that that's the biggest concern. During the meeting, Zuckerberg also took time to address the recent NSA data sharing scandal. What did he have to say about that? Well, you know, he said that basically what we've been hearing from a number of companies now that the government agencies really can't plug in the Facebook servers and connect directly. And, you know, when they do receive warrants from the government, it follows the processes that follow this process that are similar to court orders and that a minimum amount of information is given to comply with the law. Basically, they're not working directly with the NSA. They don't have, you know, direct access that, you know, this is where they stand on this. With all the tension that was going on yesterday, was there any sway in shareholder votes or upsets in the company's board of directors? Well, you know, yeah, you know, it's hard to say. I mean, I think that certainly they must be feeling some pressure here. I think that the thing is Facebook just really needs to get to work and find that silver bullet. You know, it's a hard thing to balance again, you know, to keep doing what you did to get here in the first place and still play the Wall Street game and hit the, you know, hit the street and hit Wall Street and be accountable. I mean, it's two different things because you're now accountable to those shareholders. You know, we're seeing response from Facebook that says, hey, you know, we care, we get it, you know, we're working on it, but they don't have an answer right now. That's obvious. So, you know, this pressure will continue until they come up with something that says, you know, this is what the growth looks like. This is what these opportunities look like. And, you know, we expect X, Y and Z. Do you think Facebook was successful in settling those shareholder concerns? I think thus far no. It's kind of the juries out there and I think that we'll see some response to that I think in the short term, you know, especially in line of all these different things that are going on out there in terms of like, you know, Google and their growth and, you know, Apple and all the things that they do, you know, there are better options out there and I think a lot of people are looking at that and saying, you know, why is that money tied up here? John, if you were a Facebook shareholder, would you stick around to see what happens or would you be running for the hills? Well, you know, yeah, when you think about Facebook and when it came out, it was, you know, the hot thing and it was a hot thing for a while and that's all good and well until it isn't anymore. You know, it's the place where people, you know, go to find news and entertainment until that doesn't happen anymore and we've seen reports of their audience sleeping and a bunch of, you know, different markets and things like that, you know, especially among the youth. You know, it's an interesting thing because Facebook's dynamics, you know, it really works as a platform for people to represent this version of their ideal lives to this audience that you select and that makes the network of friends that you have on Facebook a little more than just really an audience that you select. So, you know, I think that there's a danger here that this may go the way of of my space and it's starting to we're starting to see some signs of that like, you know, some missing clarity and things like that with these monetization issues still lingering with this, you know, not concrete plan that's out there. I would have, I'd be highly concerned about my investment in a company like that and I think that a lot of people are going to be looking at it like that. I mean, certainly, you know, very cool technology and very cool. It's implemented a lot of people using it. But, you know, again, my space was in that position and I think that, you know, this could be a potential issue that we'll be reading about for a while. So, with that 40% drop from this year to last year, do you think that they're going to continue on that trend or what are your predictions for next year? Well, I think that for the next year, I think that they're going to definitely be looking at this advertising and cranking that up, increasing their audience. You know, we've seen all the maneuvers that they've tried to keep hip and try to be more instant. And I think that that's one of the things where I think the fundamental nature of Facebook really kind of underlies, you know, when in comparison to some of these other, and like Twitter. You know, Twitter has a lot more value because, you know, now you're really consuming things as opposed to, you know, distributing things and I think that, you know, it's kind of both, but I just think that the issue with it is this fundamental model and I think that, you know, they need to find ways of using that, integrating it, continuing the mobile efforts, continuing the mobile ad stuff and I think that, you know, there's potential that it could turn around but they need to figure out a way to do it pretty quickly. It sounds like a lot of the shareholders chose Facebook because of its popularity or because they were familiar with it. Do you think that's dangerous territory when investing to go with something that's on the upswing in terms of trendiness? Oh yeah, absolutely. Absolutely. I think that, you know, there's a lot, there was a lot of buzz that came out about it. A lot of people were talking about it and people that are, you know, kind of casual investors or lazy investors may have said, hey, this is the big thing. I see it everywhere, you know, they must have a plan without looking at the fundamentals of what makes that business tick, how does it compare to, you know, to other products that are out there. Okay, it's the first one to IPO, the first social network really to IPO. You know, is this the one where I want to, you know, put $1,000, $10,000, whatever, you know, into that and, you know, in a lot of cases, maybe people should have stepped back and say, hey, you know, this is not the time for that, you know, let's wait to see how it does and what the prospect of three to five years you know, is this something I should, I think that a lot of people really are taken aback by, you know, its performance and I think that drop is something that, you know, hopefully, first Facebook's sake is something that they turn around, you know, but they'll always have this property, they'll always have that brand, so there's some things going forward. I just think that, you know, in the short term, it appears they weren't ready at this point and there are signs that continue to indicate that that's the case. Well, John, thank you so much for providing your analysis this morning and it's been great to have you. Thank you. We'll talk to you soon. Take care. And coming up here on News Desk, Samsung introduces a new camera phone and DVR moves to the cloud. But first, Wikibon senior analyst, Stu Miniman, checks in with us from IBM Edge taking place right now in Las Vegas. We looked at all the programs out there and identified a gap in tech news coverage. There are plenty of tech shows that provide new gadgets and talk about the latest in gaming, but those shows are just the tip of the iceberg and we're here for the deep dive.