Zuckerberg on Facebook's Future

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As Facebook tries to sustain its supercharged growth, it's bringing in adult supervision.

The social networking site hired Sheryl Sandberg, who ran Google's (GOOG) AdWords and AdSense keyword advertising business, as chief operating officer on Mar. 4, reporting to 23-year-old CEO Mark Zuckerberg. Last year, Facebook grabbed former YouTube chief financial officer Gideon Yu from Google to fill the same position. The company also brought in Chamath Palihapitiya, formerly of AOL (TWX) and the Mayfield Fund, as vice-president for marketing.

Sandberg, 38, arrives at Facebook at a pivotal time. Membership has ballooned to 67 million users in just four years. But the company faces challenges expanding overseas, reassuring users and government officials about member privacy, and creating an advertising system that cashes in on Facebook's popularity without turning off users.

Zuckerberg, in a conversation with BusinessWeek.com technology writer Aaron Ricadela, discussed Sandberg's role, Facebook's expansion plans, and his perspective on a possible initial public offering of stock.

How did you find Sheryl Sandberg? Did you do an executive search?

This wasn't a formal search. We didn't use a recruiter. I met her at a friend's Christmas party before the beginning of 2008, in one of the Bay Area towns—I don't remember which one, or where all the borders [between cities] are. Then we started talking a lot at Davos at the end of January. We had a lot of time to talk there. There are a lot of people who are talented at scaling operations and building companies. But her experience at Google gives her just about the most-relevant industry experience that anyone could have. Even though our product is very different [than Google's], there are components that are similar. One is scaling sales operations.

What strengths does Sandberg bring to Facebook?

As we build this communication system for everyone in the world, we're scaling our business operations quite a bit. The technical components of the company will still report to me. But all the business operations will report to Sheryl—direct and online sales, marketing, communications, policy, human resources, and user and consumer operations…. As the company has grown, that role of managing all the business operations and the team of people has been really important. Last week, Matt Cohler, a longtime executive, was put in charge of product operations. All these changes are set up to help us scale in the coming years.

Are there other management jobs you're looking to fill?

We're also recruiting right now for a general counsel and a head of communications and public policy. The communications person will report to Sheryl, and the general counsel will report to the CFO. The public policy job will involve communicating what we stand for and how the company is going to act. Right now we could be doing a better job [of that].

What are your plans for an IPO? I gather this may not happen until 2010. Why are some of the most promising Web companies, like Facebook, Slide, and LinkedIn taking longer to go public these days?

We're not even thinking about an IPO right now. I know the guys who run Slide and LinkedIn, and they're smart. In the past, a lot of companies viewed it as their goal to go public. We're focused on building a company for the long term, something that can really deliver a lot of value for everyone. Going public is a secondary thing, and we'll do it when it makes sense for us.

What's your perspective on the outlook for the online advertising? Some experts predict a slowdown in revenue growth and question the efficacy of advertising on social networks in general.

We just launched the last iteration of our online advertising product in November. I can't speak to broader market trends as a whole, but we're in a rapid growth phase right now. Even if there is some broader slowdown, we'll continue to grow over the next year. All the metrics we're seeing point in a positive direction.

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