While Facebook CEO Mark Zuckerberg made the media rounds to talk up the site's 1 billionth user, he ended up spending a lot of time defending the future of the site. The PR tour tied to that milestone, which included an appearance on Rock Center with Matt Lauer and an interview in Bloomberg Businessweek, was to supposed to showcase the social network's amazing achievement and continued success. But, instead, Zuckerberg found himself talking a lot about the worries surrounding the company now that it's a publicly traded corporation.
Should Zuck Step Down as CEO?
Since the stock has lost almost half of its value since the public offering about six months ago, some have suggested that maybe Zuckerberg should cede the CEO role to someone with more corporate experience. Lauer came right out and asked Zuck what he thought about that. "An article I read said: 'Is Mark Zuckerberg in Over His Hoodie?' Do you think a CEO who has more experience might be able to take this company to the next level?" Clearly not at all amused with the "hoodie" pun, Zuck responded with what we wouldn't even call a half-hearted smile. Maybe a quarter-hearted smirk?
It doesn't sound like Zuck likes that idea at all, telling Lauer he takes the job "really seriously" and that building the product and the business "go hand-in-hand." But, Bloomberg Businessweek's Brad Stone and Ashlee Vance push the question further, asking "What do you know about the public markets and about institutional investors that you wish you had known maybe six months ago?" That very question assumes Zuck wasn't cut out for the job in the first place, since he didn't know enough six months ago. Again, the Facebook creator doesn't admit he's not CEO enough for the job, reiterating a point he has made before. "We're focused on the long-term."
Where Will The Next Billion Come From?
As Facebook has matured, its user growth has slowed. That, too, has investors concerned because Facebook's money-making plans depend on that. So, how does Facebook expect to keep this up? "Now people want to know where the next billion are coming from and the pressure is firmly on your shoulders," said Lauer. Bloomberg Businessweek's Brad Stone and Ashlee Vance had the same question. This gave Zuck a nice chance to plug their mobile efforts. "The big thing is obviously going to be mobile," he told Vance and Stone. "There are 5 billion people in the world who have phones, and a billion people using Facebook. There are actually already 600 million people using Facebook on phones, so that’s growing really quickly. And as more phones become smartphones, it’s just this massive opportunity."
How Will Facebook Make Money Off of All These People?
More people isn't enough. Facebook has to keep its users coming back in a way that gets advertisers attention. Even in his handcrafted note with the milestone announcement, Zuck hints at that little issue. "This morning, there are more than one billion people using Facebook actively each month," he writes, using the word "actively" to remind us that its users are still engaged and addicted, despite statistics that say otherwise. But what about that other issue? What does more people do for the bottom line, Stone and Vance wonder. "What’s possible at a billion-plus users that wasn’t possible at, say, 500 million?"
In the last few months, there has been concern over Facebook's advertising model, which so far doesn't differ much from a standard web-site with display ads. (Though, of late, the social network has incorporated more user data.) More people will generate more money, but as we've outlined before, that is not a promising model, since web-ad value is constantly declining. Zuck, however, has another plan:
So for the next five or 10 years the question isn’t going to be, does Facebook get to 2 billion or 3 billion? I mean, that’s obviously one question. But the bigger question is, what services can get built now that every company can assume they can get access to knowing who everyone’s friends are. I think that’s going to be really transformative. We’ve already seen some of that in games and media, music, TV, video, that type of stuff. But I think there’s about to be a big push in commerce.