Ding Ding Mark Zuckerberg Gets It Right – Growth on Platform is Key Not Ad Sales October 9, 2008Posted by John in Technology.
I’m happy to see Mark Zuckerberg in the right frame of mind. Granted he is 24 years old but he’s got the right read on the roadmap of Facebook. He says in an interview in Germany … “Growth is primary, revenue is secondary.”
I wrote earlier in the week my concern for Sheryl Sandberg (who I’ve never met so I don’t have a good read on her vision) but all signs point that she is more revenue focused. As I was saying yesterday the best move for facebook is …“Personally I don’t think that they have to produce the monetization answer right now but instead just focus on the product leadership and key business development deals. I have no idea why Sandberg even entertains the monetization question at all.”
Mark explains the relationship between the CEO and COO Sheryl Sandberg ..”She is an excellent manager. She is very good in building our international organization. I’m focused on the direction of the company, especially of the product development, and the overall strategy. I spend a lot of time working with engineers and product developers. We work together hand in hand.”
Mark is focused on the direction of the company. Lets see the platform strategy – that is the key to success for Facebook. Get that right and the monetization will take care of itself. The ad model isn’t there yet sure milk the low hanging CPM fruit but don’t focus on monetization solutions that don’t work for users or advertisers – that is 99% of all ad models today.
From Alan Wilensky’s comment below I would add the following about Facebook’s prospects in this upcoming potential downturn…
I’m very bullish on Facebook. There is value there. I’ve lived through this movie and the outcome is not that bad for Facebook. Everyone was saying the same thing about Google in 1999 when search was in the dumps prior to the last massive downturn. Google focused on its product and bada bing they deployed the revenue model that worked for their platform. Same is in play here for Facebook. I’ve been critical of Sheryl because she should address the monetization piece because the growth and utility of Facebook is real. I would pour it on with advances at the platform level and add to the utility of the product as fast as I could …
No doubt Facebook will survive but how they do that should be on their terms… They can milk the low hanging low CPM revenue just on shear volume plus the cash on the books eliminates their risk of going out of business. The key to their utility is to continue to be relevant on the product side.
The only thing that might hurt them is a big risky move on the product side and their inexperience might contribute to that (I doubt it will be the case). One thing that is a red flag is the early guys on the product and engineering side are leaving… I just don’t get that.. the messaging that they wanted to do something else doesn’t work. All great companies had core teams that stayed on from the beginning (microsoft and google). Neither of those companies (Microsoft and Google) had this much exodus this early hence the red flag.