Interview with Facebook COO Sheryl Sandberg about the business in Germany, growth rates, the limitation of banner ads, the (not existing) plan to build an advertising network and the (not existing plan) for going public.
When I met Mark Zuckerberg in 2008, just at the beginning of the economic crisis, he said: „Our focus is growth, not revenue„. Now, the same question to you: Is Facebook focusing on growth or on revenue?
Sandberg: „We’re focused on both – growth and revenue. In Germany, we’ve gone from 2 million users to 7.5 million in one year. 300000 people in Germany do a status update every day. Globally, we’ve growing from 150 million users to 400 million. Our goal is to connect the entire world. So, 400 million is nice but it is not the whole world. We’re very focused on revenue as well. We’re growing both at the same time.
Can you give me some numbers about your revenue growth?
Sandberg: We said a year ago that our growth in 2009 will be 70 percent, higher than 2008 and that we’ll be cash-flow positive in 2010. We were cash-flow positive in 2009, so our growth was even higher than we said. We can cover much more than our costs. We can cover all of our investment.
You finished your partnership with Microsoft in display advertising. Can you do that better than Microsoft or are banner ads the wrong way?
Sandberg: Banner advertising is not what works best on our website. We believe that banner advertising everywhere is pretty limited. Banner ads can talk only to you. They can’t listen to you and they can’t help you communicate with anyone else. Our ads can do a bunch of things other ads can’t do. You can interact, you can say ‘yes‘ to an event, you can buy a ticket to a movie. That is working very well on Facebook.
Mark Zuckerberg said the mod el for Facebook is not to be a website; it’s to be a platform. Can you imagine building an advertising platform like Google Adsense, based on Facebook Connect?
Sandberg: Marks vision for the company is definitely a platform. But we are doing advertising on our own site. We are not working on an advertising platform. We have no plans to do that; with advertising on our own site we can more than cover the cost of the investment we need to make.
Companies like Foursquare introduced the „check-in“ as a location based service for social networks. Do you plan to check-in too?
Sandberg: We don’t have our own location based service und we are not working on that. We will never automated track where our users are. But we are a platform. I know developers who work on location based products.
Another interesting rumour is project Titan. A re you working on a full featured e-mail-client?
Sandberg: We have inbox and we are continuing to evolve that product.
What about the long expected IPO?
Sandberg: We have no plans to go public right now. We can fund our operations with our current business.
Which sort of advertising is working on Facebook?
Sandberg: Marketers had known for a long time: What they really won’t to do is to get consumers so sell their products for them. So if I see an ad for a product it might interest me and I buy it. If I hear from a friend that he tried something, that endorsement I really care about. People on Facebook connect to their friends, but they are connected to brands. What marketers have figured out is that they work with us to make sure that their products are represented the social graph, people will recommend their products to other people. What’s really new: Our ads are really interactive and give people the opportunity to interact directly with the marketers and interact with each other.
Is Germany s special market with strong local competitors?
Sandberg: In Germany we had a local competitor which was very similar to our own site. We are now growing much faster than our competitor and we are larger than any other single social network site. It takes a little more time here in Germany than in the UK. But when think we are on our way to achieve that in Germany too.
Sheryl Sandberg and Scott Woods, Commercial Director Germany
Photos: Jesco Denzel