Zuckerberg Says Facebook’s Focus is on Growth, Not Revenue

Those investors buying Facebook shares next month and hoping the company will put the revenue pedal to the medal will probably need to be a little more patient.

In an interview with the German newspaper Frankfurter Allgemeine Zeitung today, Facebook CEO Mark Zuckerberg says the company is focused on growth first, revenue second. (Note these translations are not perfect.)

What every great internet company has done is to figure out a way to make money that has to match to what they are doing on the site. I don’t think social networks can be monetized in the same way that search did. But on both sites people find information valuable. I’m pretty sure that we will find an analogous business model. But we are experimenting already. One group is very focused on targeting; another part is focused on social recommendation from your friends. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today… Growth is primary, revenue is secondary.

And when asked about a potential IPO:

No, we are really not planning to go public. For the next few years we are really focused on user growth.

Finally, when asked about why the company is allowing employees to sell up to 20% of their vested shares (up to $900K), Zuckerberg answered:

We are not going public for a while. So we want the people to have enough money to life [sic] for the period of time until we go public. In the early days of Facebook I was able to get 900000 dollar of liquidity. That made a pretty big deal to me. We want engineers or other people in the company don’t have to worry about simple things.

With probably somewhere between $300-$400 million in the bank from a combination of recent equity investments and debt financings, it makes sense for Facebook to make sure they build out a widely adopted communications platform before trying to aggressively squeeze money out of the system.

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6 Responses to “Zuckerberg Says Facebook’s Focus is on Growth, Not Revenue”

  1. jason bailey says:

    When you aren’t making any money it is easy to say “we aren’t even trying to make money”. As soon as you say you are trying, expectations go way up. No one wants to hear the story about the guy not making any money from his millions of customers. Everyone wants to hear about the guy with millions of customers who isn’t even ‘trying’ to make money yet. Both are the same guy, one just has a better spin doctor than the other.

    There is a tonne of money to be made from these eyeballs, lot’s of third parties are getting their fair share of that. Facebook can and will make money. I think Mark is downplaying how hard those ‘secondary’ teams are working.

  2. Nick Stamoulis says:

    Oh c’mon, it’s about both! Afterall.. growth usually means revenue anyways.

  3. Evan says:

    Yes, totally agree. I understand their objectives as any other company or business out there to create revenue but don’t go around flinging bullshit at people. The revamping of the website was almost certainly done to increase the marketing reach of advertising companies.

    Evan
    http://www.beyondrace.com

  4. Kyle Brady: A Blog » Archive » How To Cut Your Startup’s Costs says:

    [...] Ted so sagely mentions, the “business model” of “traffic first, profit/sustainability later” no longer flies.  Technically, it never did, but the funding community apparently won’t [...]

  5. mike ashworth says:

    In his interview with the German newspaper Zuckerberg it states the following

    FAZ: Will social networks cannibalize the E-Mail?

    Yes, that is definitely possible. E-mail tends to have more functionality. But social network messaging tends to be very simple.

    Now let me pick myself up off the floor from laughing.

    Facebook purports to be a tool that allows people to stay in touch with others around them, “social networking” call it what you will. This is blatantly not the case.

    I have recently been administering a successful group on facebook called “bounce your balls for cancer”.
    http://www.new.facebook.com/group.php?gid=2345662295

    It is an organisation which raises funds for mens cancer charities and also raises awareness generally.

    To grow the group I have taken an innovative approach (innovative as it has never happened to me) and started to send people a thankyou message when they join the group. This seemed like a very “social” thing to do and in doing so I also ask them to share the group with others if they wish to do so.

    I have now received an “official warning” from facebook that they believe I am spamming people and if i’m not careful I’ll get banned / account disabled.

    How ridiculous!

    Sure I could send out a message to the entire group and within it thank those people who’ve recently joined however that’s spam as ppl only need to be told thankyou once. anything that is not relevant is spam, end of story.

    Now, if facebook could introduce a function that allowed an auto message to be generate to ppl joining a group or fan page and I could place the thankyou text within that etc. that would work. I can have autoresponders for my email why not facebook? there you go facebook another idea for your Developers, where do I pick up my shares from?

    I really don’t believe that their messaging system and the awful chat functionality will develop sufficiently to eat into the market share of email and messaging platforms.

    I am also finding that more and more facebook is just another broadcast tool for people who want to shout at potential customers rather than engage in dialogue / conversations

    Mike Ashworth
    Marketing Coach and Consultant
    Brighton and Hove, Sussex, UK

  6. How to measure success ? (Both Social + for profit) says:

    [...] Zuckerberg Says Facebook’s Focus is on Growth, Not Revenue [...]

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