Rory Cellan-Jones

Facebook's founder - too late to cash in?

  • Rory Cellan-Jones
  • 10 Oct 08, 18:58 GMT

The door opened and a tired-looking man in jeans, t-shirt and trainers walked into a cavernous room at London's Excel centre. He seemed pleasant, if shy, and younger than his 24 years - but this was the founder and chief executive of a business valued at 15 billion dollars last year.

It's quite sobering to meet a billionaire (on paper at least) who is half your age, and I was a little concerned about how our interview with Mark Zuckerberg might go. He's halfway through a whistle-stop tour of Europe and I'd been warned that he was jet-lagged and had been irritated by questions from German journalists about his youth, the way he dressed and his huge wealth.

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And once we got underway another terrible thing became clear - he'd been media-trained. So at first his response to just about any question sounded the same. "We're all about new ways to share information...." The only answer was to interrupt, and that seemed to wake him out of his media-trained trance.

It was when we got down to the question of money that I really thought we were getting somewhere. When I interrupted him to ask whether he shouldn't have sold up and retired last year, when Facebook was being offered billions by the likes of Yahoo, he laughed. "What would I do?", he asked, obviously incapable of imagining a life of idle luxury, rather than one spent staying up all night coding and eating pizza.

He wouldn't tell me whether Facebook was now profitable - and one can assume it isn't - but insisted that the priority was to keep on building membership rather than worry too much about revenue. That sounded to me like a worrying echo of those dot com days of the late 90s when the accepted wisdom was that you worried about "eyeballs' on your site, rather than dollars in the bank.

Earlier this year, Bebo's founders, who'd once seemed equally determined to stay independent, sold up to AOL for $850 million, netting a fortune for Michael and Xochi Birch. That now looks like a fantastic deal - and in the deepening economic gloom, there won't be many more where that came from.

What came across though was Mark Zuckerberg's enthusiasm for what he did - he kept telling me how "psyched" he was - and his focus on the technology rather than the commercial side of the business. But you can't help wondering whether this time next year Facebook's founder will be a little less confident about the wisdom of staying solo.


  • Comment number 1.

    I saw Mark today at FOWA, the conference he addressed at ExCel after you filmed your interview.

    I thought the very same that he had been through the media training mill.

    He did seem to come across as someone who is genuinely focused on his product, rather than taking the money and running.

    He is right that the $15bn figure is made up, a calculation based on how much Microsoft paid for 1.5% of the site last year.

    Much more brave was the $1bn he turned down from Yahoo last year - that too real courage or arrogance - only time will tell.

    The thing is, whatever happens to Facebook, Mr Zuckerberg has little to worry about.

    In face, from his FOAW interview, sounds like he is working on the next big thing already.

  • Comment number 2.

    While it sounds impressive that this guy has created a multi billon pound business out of thin air, it is still just on paper, in actual fact it is worth nothing of the sort.

    It sounds like hype and people in high places marketing something which is essentially worth nothing, a little like the billions governments are supposed to be pouring into the shaky Banking industry. The interesting questions regarding this are never asked by journalists, like where will the government get the money from? Will the banks have to pay interest on this? Will the banks cut the National Debt (money supposedly owed by governments aka tax payers to Bankers over generations and which keeps growing)? The truth is all of it is a lie and the emperor wears no clothes and it takes someone who is not beholden to their employers and the State to point out this simple fact. Facebook is worth nothing.

  • Comment number 3.

    If I were him I would be crying into my latte every morning. $1billion of real, 2007-vintage dollars buys a lot of pizza...and gives unlimited scope to tinker with "new ways to share information", if that's what he truly cares about.

    I really hope Zuckerberg is as upbeat when the entire economy implodes and he's down to the point where he can't even afford Facebook's hefty server bill.

  • Comment number 4.

    Some people are not that motivated by having loadsa money and being rich and do primarily get off on what they do. It's an existential thing, their raison' detre. Once you've bought ten houses and twenty cars and been on a hundred nice holidays, cars, houses and holidays become very boring, unfulfilling. Maybe he doesn't need the trappings of wealth to feel good about himself? Maybe what he needs is to be creating code. Good for him.

  • Comment number 5.

    I'm very wary of Zuckerberg. He is consistently linked with Neo Con think tanks and many would suggest that Facebook is in fact a way of social monitoring and not networking.. it may well be his motivation, like so many media moguls, is power and not money.

    This article, although from a leftist liberal stance, is something to consider

  • Comment number 6.

    Brilliant Rory!

    So, after weeks of banging on about the financial crisis we get to see and interview with the creator of one of the most influential websites on the net today. I thought it would be about the future, feedback about the recent changes and have a generally *technology* focused edge to it.

    Instead we get a couple of minutes of you bullying the guy into answering questions the he is clearly not going to answer, and I couldn’t give a damn about.

    Looking at the Technology minisite on today you could be forgiven for thinking it was the business minisite. I know it is perceived that business is ‘where the action’ is at the moment, but those of us who click on ‘technology’ want to read a technology story. Not a rehashed business story with a mild ‘technology’ reference in it.

    You have made it clear Rory that business was your first calling. If this is so then do us a favour and hand over the reins of the technology minisite to someone who gives a damn...

  • Comment number 7.

    I love this piece Rory. Although knocking social networks and everything Web 2.0 seems a fashion that has started to overwhelm in the last week, it is entirely fair to be asking Zuckerberg and others or trade on massive valuations exactly how they can be justified.

    There is indeed a direct link to current over-inflated valuations and all that was happening 8 - 10 years ago during the Dot Com boom. I read some of the interviews with the German papers and Zuckerberg was happy to say that revenue is "not important" and the focus is on growth. This has exactly the same ring as the Dot Com Boom which, lets remember, burst when the markets met some turbulence overall and everyone realised that the crazy valuations being promoted by so-called "analysts" were the Emperor's New Clothes.

    Any business without a plan of how to really benefit its customers while making money is NOT a business. Facebook is fun but has dubious value; it's "customers" pay nothing and have proven in their switch from MySpace that they are fickle. This is a $15Bn valuation on a house of cards.

    As founder of a UK-based business focused social networking with a solid business model and revenues, I look forward to a clear out of the space when reality hits the people who fund most of our rivals.

    Ian Hendry
    CEO, WeCanDo.BIZ

  • Comment number 8.

    I have enormous respect for Zuckerberg and as far as web apps go, Facebook is deeply impressive.

    However, I feel that the "valuation" will be the Ratner-moment that follows this guy about for the rest of his career.

    Facebook fundamentally is a brand name and little more. The technology, although beautifully implemented, is not unique and will be copied and improved on.

    The biggest worry for guys who have come out of bedrooms to end up with a mega-valuation company is that someone else will do the same and crush them (the "only the paranoid survive" approach).

    However, unlike Microsoft, HP, Intel, Apple and latterly Google, Facebook simply doesn't have a mega-valuation (licence to print money) business model beneath the hype. Heck, the best they have come up with is advertising for advertisers on Adwords and anyone who has seen conversion stats for social networking...ouch!

    Flogging the world's hottest brand of 2007-2008, Zuckerberg could have made himeself at least a couple-of-billion-dollar-aire. Trying to sell Facebook as a technology play in a couple of years time... well, that might be a bit harder.

  • Comment number 9.

    @ Ian Hendry...Plug Plug Plug. Drop this stance and speak for yourself not your "business" then you can be taken seriously.

  • Comment number 10.

    Facebook will go the way of Friendster: utterly worthless.

    The moral of the story is an old one -- never stare a gift horse in the mouth.

  • Comment number 11.

    Good interview from both sides - Rory asked all the right questions in these troubled times - and pushed as about as hard as he could assuming he ever wants another interview with a senior technology company leader - and Z said absoloooterly nothing at all; media trained to just beyond the boredom pain threshold.

    The leaders of Facebook, the Googles and Microsofts of this world should be quizzed hard on their business models: after all it is us that is entrusting our personal data to them so they can make money of the back of it.

    If don't trust their business intentions, why should we give them our data?

  • Comment number 12.

    @stublake13... When you found your own business it is your baby. It's a reflection of yourself and there is no difference between your own view and that of the company you own. My views remain consistent and I stand by them regardless of what hat I am wearing.

    Perhaps this fact is at the root of Zuckerberg's problems. He still wishes to bring the baby up himself and in his image, although also wishes to trade as a $15Bn internet goliath at the same time. I don't think the two are compatible unless you have entrepeurialism in your genes. By contract, I think Mr Zuckerberg is a geek who got lucky rather than an entrepreneur. Unlike the business savvy Google co-founders, he has raised the money but hadn't shown he can do anything clever with it (e.g. identify a revenue model!).

    Ian Hendry
    CEO, WeCanDo.BIZ

  • Comment number 13.

    You're probably right, Ian.

    Facebook is stuck in a rut because it's got the wrong man at the helm.

    Zuckerberg was someone who got lucky and then didn't know how to make the most of it.

    Time will tell when his luck runs out, but it won't last for ever.

  • Comment number 14.

    The great part about having young successful Internet millionaires is their vision have became reality, I would rather see that, than some guy wearing a smug smile because he just happened to be born into a rich family.

    Peter Arkwright

  • Comment number 15.

    We have tried monetizing facebook and using it's ad space, with no success at all.
    That's not to say that it can't work , maybe our product wasn't ideally suited , but I haven't spoken to any advertiser that has figured out how to monetize it yet, which means they must be finding it hard to sell ad space and make money from their platform.
    He seems like he genuinely enjoys what he's created, so fair play to him.
    Rich Paylor


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