The Breakfast Meeting: Facebook Disappoints, and Romney as Fodder in Britain

By NOAM COHEN

Facebook disappointed investors on Thursday with its first financial report as a public company, and the company's stock price took a hit, Somini Sengupta reported. In after-hours trading, the share price dipped to $24, a new low and 37 percent below where it was set as an initial public offering. The results were a mix: revenue in the quarter climbed to $1.18 billion; on an adjusted basis, the company posted a profit of 12 cents a share, or $295 million, meeting analysts' expectations. But all eyes were on the service's potential growth, and users' transition to mobile devices, and there the picture was murkier, Ms. Sengupta writes:

During the call with analysts, company executives emphasized their efforts to make Facebook accessible on mobile devices. The company only recently started surfacing advertisements in the mobile newsfeed. And while company executives said they were seeing promising results, they also sa id they were being careful not to crowd the mobile platform with too many advertisements, lest it spoil the user experience. The company said 543 million people looked at Facebook on their mobile devices at the end of June, a 67 percent jump from last year. “The shift toward mobile is incredibly important,” Mr. Zuckerberg said during the call.

• In listing the five take-aways from the earnings call that featured Facebook's founder, Mark Zuckerberg, Jenna Wortham homed in on Facebook's accommodation of its mobile users. The riddle is that Facebook says its users are more active on mobile phones, but may be harder to reach through advertising; also, Facebook currently can't process mobile payments for social games; finally, Mr. Zuckerberg also poured water on the idea of a Facebook cellphone.

Amazon.com presented a vastly different picture in its earnings call, David Streitfeld writes: fast growing revenue, almost no profit. That is, the c ompany reported sales of $12.8 billion, up 29 percent, in the second quarter while producing net income of $7 million, or a penny a share. This is a familiar story for Amazon as it invests its revenues into expanding its consumer base.

• Amazon is building fulfillment centers, many of them close to major cities, including New York City, San Francisco and Los Angeles, Mr. Streifeld writes, signaling a shift in priorities: “In the past, Amazon declined to build warehouses in states where it had many customers, because it would then have to collect sales taxes from them. Now the promise of offering these areas even faster delivery seems to be more of an imperative than continuing to fight the tax issue.”

A surprising new idea has been floated by Universal Music Group to win the support of European regulators for its planned $1.9 billion takeover of EMI: selling Parlophone Records, which releases the music of Coldplay and Radiohead and is the heart of EM I's holdings in Europe. The news was first reported by The Financial Times late Thursday, and indicates the difficulties Universal has faced in convincing Europe to approve the deal, despite concerns over what it could mean for competitiveness in the music industry, Ben Sisario writes.

Mitt Romney's comments in London about whether the city was prepared to hold the Olympic Games, and whether the British people were enthusiastic about playing host, made Mr. Romney excellent fodder for the British papers, across the political spectrum, The Guardian reported. The Times of London headline: “‘Nowhere man' Romney loses his way with gaffe about the Games”; The Daily Mail asked, “Who invited party-pooper Romney?”