Today, Facebook (FB) had yet another big product launch that came up … well, little.
The move is a direct shot at Twitter’s Vine, which has six-second looping videos, though Instagram’s videos won’t loop. Instagram also has included 13 new filters to improve the quality of the videos, as well as a feature called “Cinema” that reduces the shakiness of the shots (something Google’s YouTube already does).
Instagram’s new features are likely to help somewhat with growth; not something it’s unfamiliar with, considering its impressive ride since launching in 2010 has put it at 130 million monthly users currently.
But ultimately, the Instagram update seems to have left many feeling short-changed, giving off the impression that Facebook is playing catch-up, not innovating itself — a feeling we’ve gotten after many of it’s other recent product launches.
The company’s more recent attempts include Graph Search, Gifts and Poke, but none of those have created significant buzz.
Then there is Facebook Home, the Android super-app that essentially takes over a smartphone’s homescreen. It launched in April to some fanfare, but it’s not catching on with users.
At this point, it’s worth wondering whether Facebook is having bureaucratic problems, or even whether Mark Zuckerberg has lost his magic.
While that’s impossible to tell, it’s simple to see how bad Facebook is floundering compared to other large tech companies. For instance, since CEO Marissa Mayer came on board Yahoo (YHOO) a year ago, the company has been thrust back into the spotlight with a revamp of its offerings, a renewed focus on mobile and an M&A binge including a deal for Tumblr, which gets more than 300 million monthly uniques.
And it’s not just excitement that Yahoo is generating — it’s returns. YHOO stock is up 28% year-to-date vs an 11% slump for FB.
At the same time, Facebook must deal with a spate of new operators. Some more prominent standouts include Snapchat, Tango and Viber, and they’re all finding ways to reinvent social media.
Facebook hasn’t shown much concern yet. At today’s Reuters Global Technology Summit, chief operating officer Sheryl Sandberg spouted about how the company has made tremendous progress over the past year, and indicated that it now has a robust system to deliver mobile ads and track them.
While that’s probably indeed the case, Facebook still has a perception problem. It looks like a has-been. It looks like it’s playing defense.
That’s an ominous sign for shareholders, who are sitting on frothy shares at 30 times next year’s earnings, while more aggressive Google and Yahoo are trading at forward P/Es of just 16, and Apple’s at a low, low 9.
And all three right now appear to be much more capable of creating cool services and products.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.