Mark Zuckerberg, the creator and CEO of Facebook, has never been an easy guy to like. The 28-year-old social-media magnate comes across as distant and unfeeling and is prone to awkward pauses. He’s no friend of privacy advocates, who fret about the vast sea of personal information that more than a billion Facebook users have uploaded, and is criticized by users themselves for changing the rules about how data is shared. Zuckerberg was even accused of stealing the Facebook concept itself, as anyone who watched the 2010 film The Social Network knows.
So it comes as little surprise that Zuckerberg would irritate investors, too. Facebook’s initial public offering this spring was not only billed as the biggest tech IPO since Google’s in 2004, but stood as a testament to how much social media has changed (some might say invaded) our lives. It was also viewed as a test of Wall Street’s ability to create and spread around massive amounts of wealth. Some even argued that, by convincing ordinary investors to put money back into the stock market, Facebook and its hoodie-clad creator could revive the ailing U.S. economy.
The result, given the hype, wasn’t pretty. On May 18, Facebook’s stock began trading at the IPO’s offer price of $38. A few minutes later it climbed above $40 as the masses rushed in, and then promptly sank like a stone—with an anchor tied to it. The shares eventually bottomed out at around $17.55 about three months later, wiping out more than $50 billion in value.
Paul Ceglia, a New York man who sued Facebook for 84% ownership in 2010, has been arrested.
Ceglia, a web designer turned wood-pellet distributor, was arrested at his home in Wellsville, N.Y., on Friday. Manhattan U.S. Attorney Preet Bharara charged that Ceglia tried to wring billions of dollars out of Facebook in a con scheme. Ceglia falsely claimed to have been promised a 50% share in Facebook “and then doctored, fabricated, and destroyed evidence to support his false claim,” according to a press release from Bharara’s office. Ceglia will be presented at the federal courthouse in Buffalo this afternoon.
What I find surprising is that it took this long.
Facebook Inc grew mobile advertising revenue several times in the third quarter, a faster-than expected pace that helped reassure investors that the world’s No. 1 social network is beginning to figure out how to earn money off smartphone and tablet users.
The company now gets 14 percent of its advertising revenue from mobile ads, translating into more than $150 million — a surge from an estimated $40 million to $50 million in the second quarter and almost nothing in the first.
Mark Zuckerberg, the 28-year-old chief executive who created Facebook in his Harvard dorm room, said mobile was the “most misunderstood aspect” of the company.
“I want to dispel this myth that Facebook can’t make money on mobile,” he told analysts on a conference call.
Mobile advertising has been among the key investor concerns hanging over Facebook, helping slash more than $40 billion off its market value since its May IPO. As its users increasingly access the social network with their smartphones, Facebook has struggled to transition its business to mobile devices.
“They beat on the top line. They are talking about 60 percent of users on mobile. They are monetizing this OK,” said Wedbush Securities analyst Michael Pachter.
Facebook has a billion users. A B I L L I O N. That’s one-seventh of the entire mass of humanity that covers this planet, one-hundredth of the number of human beings to have ever lived, ever. Staggeringly few other cultural experiences have been shared so broadly, so synchronously. It’s a genuine milestone not just for technology, but for humanity (seriously). And that’s exactly how Facebook hopes we’ll see it when we look back in a few years. Facebook is a chair. And a bridge and an airplane:
When Microsoft built Windows, the mission was to put a PC on every desktop in every home. There weren’t a billion PCs in use until just four years ago. And as of the end of last year, roughly one third of the world’s 7 billion people — 2.3 billion, give or take — were using the internet. In other words, nearly half of the internet-using population is on Facebook, and that’s with it officially banned in China.
The mission of Facebook, as Mark Zuckerberg puts it in his profile, is “making the world more open and connected.” The (obvious) subtext of that “let’s all hug together, naked” worldview is that it’s Facebook making the connections. Not on an abstract level — though being a shared cultural touchstone on that scale does provide a kind of mutual emotional infrastructure — but in a concrete way. Facebook wants to be infrastructure in a fundamental way. I mean, Facebook seriously compared itself to chairs. And that’s what’s transformative about hitting a billion users, as Zuckerberg himself explains (emphasis mine):
But even when we were at half a billion people, you got these large-scale services like Skype or Netflix that also had big user bases. And we weren’t yet at the point where the majority of their users were Facebook users, so they couldn’t really rely on us as a piece of critical infrastructure for registration. A lot of startups did, but the bigger companies couldn’t. Now really everyone can start to rely on us as infrastructure. That’s a pretty big shift.
Everyone remembers the late Steve Jobs as a media sensation. Everything he touched at in his second stint at Apple turned to gold and the aura that grew around him was nigh impregnable. Favorable coverage about his leadership style and Apple’s business decisions seemingly gushed out of the press at every turn.
But what some people forget is how Jobs cultivated that aura. Instead of responding to every media hubbub, Jobs built up a firewall around himself and his company, commenting only when he wanted to, largely in controlled situations.
How would Jobs handle Facebook’s IPO flop, had he been in Mark Zuckerberg’s chair? Based on his past precedent, Jobs would probably handle it exactly the same way — by ignoring it.
Zuckerberg has not commented publicly about the widely-acknowledged disaster, and according to a Wall Street Journal report, he has made no in-house company announcements about it either. Some people might say that’s the wrong message, especially as investors express their anger and lawsuits begin.
The new Mrs. Mark Zuckerberg might not have to worry much about money, but that doesn’t mean she is automatically a billionaire.
The timing of Mark Zuckerberg’s marriage to his college sweetheart, Priscilla Chan, on Saturday, just a day after he took his company public, was certainly curious. Was he looking to clarify his net worth, which, with roughly 503 million shares, now stands at about $17 billion? And if true, many observers are speculating, did that have to do with the terms of a prenuptial agreement? The Zuckerbergs are not saying.
But what is clear, according to matrimonial law experts, is that whatever Mr. Zuckerberg earned before the marriage is still solely his property afterward.
California is one of fewer than a dozen states that follow community property laws, which specifically outline how property is divided between two spouses (or, in some cases, registered domestic partners).
OUTSIDE Facebook’s vast new headquarters in Silicon Valley is a huge sign with an image of a hand on it giving a thumbs-up sign. A tiny digital version of the same hand sits on millions of websites and invites Facebook’s 900m or so users to click on it to share content they have found with their pals. Now Facebook is hoping to get another big thumbs-up when it stages its eagerly awaited initial public offering (IPO) of 12% of its equity on America’s NASDAQ stockmarket on May 18th. Assuming all goes according to plan, the flotation will be the largest yet undertaken by an internet company.
On a roadshow across America to promote the listing this week, Mark Zuckerberg, Facebook’s 27-year-old boss, and other executives were treated like rock stars. Long queues snaked out of hotels where they were holding meetings, as investors lined up to hang on their every word. Hordes of photographers rushed to take pictures of Mr Zuckerberg, in his trademark hoodie, as he and his colleagues were whisked off to waiting limousines.
This frenzy is further proof, if any were needed, that Facebook has become a global internet idol. Facebulls reckon the flotation, which could raise almost $12 billion (with about half going to shareholders selling up), will help transform the social network into a web powerhouse in the same way that Google used the riches from its 2004 IPO to spread its tentacles across the web. And they confidently predict that Facebook’s shares will start trading well above the range of $28-35 that the firm has set for them—a range that would value Facebook at $77 billion-96 billion. (Editors Update (06:55 GMT on May 15th): According to press reports, Facebook has increased the price range to $34 to $38 a share. At the upper end of that range the company would be worth $104 billion.)
His audience this Monday morning, a Who’s Who of Wall Street heavy-hitters, with untold billions to command, shifts in its seats. Papers rustle. BlackBerrys buzz. Cue Mr. Zuckerberg and —
Wait: where the heck is Zuck?
Mr. Zuckerberg, the hoodied man-child of Facebook, is stuck in the men’s room. Apparently, the suits can wait.
Up on the stage, Sheryl K. Sandberg, Mr. Zuckerberg’s No. 2 and the polished, corporate yin to his nerdy, coder yang, vamps a little: You know Zuck, she shrugs. And the money types laugh: yes, we know Zuck.
It’s May 7, a week before Mr. Zuckerberg’s 28th birthday. And, as Wall Street, Silicon Valley and the wider world all know, something big is coming. It is the deal that will either prove once and for all that Facebook is changing just about everything, everywhere, or that the mania over social media and this company, its apotheosis, is spiraling out of control.
Inside a ballroom at the Sheraton New York in Midtown Manhattan, Facebook’s executives, spinmeisters and bankers are choreographing its initial public stock offering. This is no mere I.P.O. It feels like a cultural event, a pinnacle in the history of tech, a moment. The deep pockets have arrived at the Sheraton for a multibillion-dollar sales pitch. If all goes well, Facebook will go public on Friday in an I.P.O. that could value it at nearly $100 billion.
One hundred billion dollars — for a company that, eight years ago, didn’t even exist.
No one has more riding on this than Mark Elliot Zuckerberg, hero-villain of “The Social Network,” destroyer of worlds, devourer of time and, for better and worse, the latest in a line of revolutionaries stretching back to Gutenberg who have upended the way we communicate and think.
Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.
Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.
Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO.
“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.
Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin made that move “around September” of last year, according to his spokesman.
Warren Buffett has no plans to buy into the upcoming Facebook IPO, but tells CNBC’s Becky Quick he has spoken for a few hours with founder Mark Zuckerberg and thinks he’s doing the right thing by maintaining tight control of the company, even after it goes public.
In an on-camera interview after he spent six hours answering shareholder questions at Berkshire Hathaway’s annual meeting, Buffett told her:
“He’s a very smart guy. He’s built an incredible company. I think he’ll — he’s going to keep control of his company, that’s for sure. So he will get to paint the painting he wants to paint. And I’ve always advised any entrepreneur to try and retain that ability and fortunately I’ve been able to do it at Berkshire.”
Is that kind of control good for shareholders? “It usually is, but it’s subject to abuse… But I think if you’ve got somebody like that to run the place, you really want him to run the place.”