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Billion-Dollar Facebook Investor Tells Mark Zuckerberg to Quit as Chairman

73 points by rakibtg 9y ago

deleted 9y ago
[deleted]
itsdrewmiller 9y ago
Save you the click - it's the comptroller of NYC who represents a pension fund. Not sure whether he qualifies as an "investor".
- nacho2sweet 9y ago
  I mean I was guessing "What is Carl Icahn up to now?".
- maxxxxx 9y ago
  Why would he not qualify as an investor?
  - vasco 9y ago
    Not his money.
    - andrewjl 9y ago
      That disqualifies every institutional investor from being called an investor
      - maxxxxx 9y ago
        Yep.
      - abritinthebay 9y ago
        Unless they are officially speaking on behalf of the fund... yep. It doesn’t appear that this guy was speaking on behalf of the pension fund, just personally, so really he isn’t an investor.
        maxxxxx 9y ago
        A lot of VCs aren't investors either by that definition.
        andrewjl 9y ago
        I don't know about that. Institutional investors have a raft of obligations to their clients, including not doing things like intentionally making their investment go down in value. This is a complicated topic, hence why securities law is a thing, but I wouldn't dismiss something an institutional investor says just because they're not speaking officially. It's still their career, investment track record, and client obligations on the line.
- dragonwriter 9y ago
  The pension fund obviously counts as an investor, and if he is speaking in his role as a representative of that fund, it is an investor speaking (the fund), whether or not he individually counts as an investor in Facebook (which presumably he doesn't, because conflict of interest codes would probably then prevent him from also being involved with investments in the firm on behalf of the public pension fund.)
debt 9y ago
I don't disagree. I think Zuck is the face of the Facebook brand, but I don't think he's the right guy to run a company of this size. He was instrumental in two great acquisitions: WhatsApp and Instagram. Other than that, many of his initiatives are nearly complete failures: Internet.org, Facebook drone internet, Oculus, Portal, Facebook Phone, the developer program, the cloning of Snapchat, his own national press tour, etc. Not to mention, he's had numerous serious public-facing, brand-devaluing flubs that are literally too innumerable to list here. For some reason, he doesn't surround himself with the best people anymore. I think because he's surrounded by an army of comms/PR people rather than actual scientists and engineers at this point.
- camillomiller 9y ago
  The cloning of snapchat has succeded though, Instagram is doing great and it’s actually stealing users from that platform
  - debt 9y ago
    I agree it was a business success. It's just not very innovative. But in business a lack of innovation is sign of decline. It signals to people that a company has become reactionary rather than revolutionary. I don't know if it matters, but it could be a cause for concern.
    - EpicEng 9y ago
      I'm fairly certain you would characterize nearly all of the world's largest and most successful companies as "not innovative" and therefore on the decline.
    - camillomiller 9y ago
      Samsung. :)
- sidlls 9y ago
  Actual scientists and engineers (I'm both of these) often are too narrowly focused on their own interests to be good at business at the scale of Facebook (or anything else for that matter). Scientific and engineering acumen are signs of intelligence, but not indicative of being "the best" in most contexts.
camillomiller 9y ago
Regardless of who’s giving the advice, it’s actually good advice. The guy has completely lost touch with reality. His comments on Apple and Tim Cook (who has never attacked Facebook directly, just replied to a specific question) show that he’s also losing the needed institutional composure his position requires. Personally I thing his argument (we profile you for advertising ‘cause that’s the only way to give a service to poor people as well) is utter BS.
- josefresco 9y ago
  > who has never attacked Facebook directly, just replied to a specific question Both of them "sideswiped" each other. > The guy has completely lost touch with reality This is true.
- nostromo 9y ago
  It's interesting Zuckerberg called Cook's comments glib... right before claiming that Facebook is free because it cares about poor people. Zuckerberg clearly won the glib prize in this exchange.
- pinewurst 9y ago
  There's a big difference between posters on the side of a city bus and Facebook surveillance. Zuckerberg is trying to obscure that difference as "nothing wrong with being advertising supported".
pnloyd 9y ago
Question for anyone who knows the answer. Is there any legal way to force a majority controlling shareholder to do anything? I've read about Larry Page and Sergey Brin regularly ignoring shareholder requests to relinquish some of there powers over Google.
- mullen 9y ago
  Nothing they can do. Facebook stock is separated into "has 10 votes" and "has 1 vote". Mark owns the majority of the "has 10 votes" stock. He can literally do anything he wants with Facebook and there is nothing anyone else can do about it.
  - ballenf 9y ago
    There are always limits. Every state has minority shareholder rights, even if the barrier to raising a claim is high. The other, maybe obvious, area where the majority shareholder's authority is with regard to illegal acts. This is grayer than it seems in complex regulatory environments. The practical approach is to get New York or California state legislatures to pass strict privacy controls. (I will then get a cheap post office box in that state and "move" my account under those restrictions on any platform that has much of my data.)
poooogles 9y ago
>We’re not trying to harm Facebook, we’re trying to make it a stronger company. Ha. That's a statement and a half. Does answering to shareholders make your company stronger? Lots would argue that too many shareholders focus on short term growth over long term strategy.
- eganist 9y ago
  In fairness, it's the manager of the NYC pension fund, so there might be more incentive for long term strategy as part of his remarks.
- dragonwriter 9y ago
  > Lots would argue that too many shareholders focus on short term growth over long term strategy. Large public pension funds are, however, not the kind of shareholders at which that criticism is usually directed.
rakibtg 9y ago
From my personal thoughts, Zuckerberg acting like a dictator. It’s shameful seeing how they started to infect the art of creativity. Everything good comes with ethics, clearly @facebook @WhatsApp @instagram are not.
thisisit 9y ago
Parts of yesterday's Zuckerberg interview [0] highlighted and commented by Matt Levine today [1]: Zuckerberg: You mentioned our governance. One of the things that I feel really lucky we have is this company structure where, at the end of the day, it’s a controlled company. We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time. Klein: That is one of the ways Facebook is different, but I can imagine reading it both ways. On the one hand, your control of voting shares makes you more insulated from short-term pressures of the market. On the other hand, you have a lot more personal power. There’s no quadrennial election for CEO of Facebook. And that’s a normal way that democratic governments ensure accountability. Do you think that governance structure makes you, in some cases, less accountable? Zuckerberg: I certainly think that’s a fair question. My goal here is to create a governance structure around the content and the community that reflects more what people in the community want than what short-term-oriented shareholders might want. And if we do that well, then I think that could really break ground on governance for an internet community. But if we don’t do it well, then I think we’ll fail to handle a lot of the issues that are coming up. [0]: https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-facebook-interview-fake-news-bots-cambridge https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-facebo... [1]: https://www.bloomberg.com/view/articles/2018-04-03/it-s-just-another-day-at-the-office-for-spotify https://www.bloomberg.com/view/articles/2018-04-03/it-s-just...
- heisenbit 9y ago
  These responses are quite revealing. Control is with Zuckerberg who has the best interest of the community in mind (right, giving liberal access to data and allow microtargeting to an extent that baffles everyone). It also raises the serious question whether Zuckerberg truly understands governance.
tschellenbach 9y ago
I think the author really underestimates how hard it is to stay relevant as a social network while trends and attitudes shift. So far Facebook's continued success has been pretty impressive. Some examples of great moves: Adopting oAuth to make Facebook the backbone of auth on the web, buying instagram when it was small, moving the company to be mobile first, buying whatsapp and making messenger a world class experience and now integrating the best features of Snap to counter that threat. The focus on messaging was especially brilliant given the current trend that people are moving away from social to a more messaging focused experience. It's pretty amazing strategy regardless of how you feel about Facebook's recent issues. I would wager that >99% of CEOs would have failed to spot those trends in time and stay relevant.
- Namrog84 9y ago
  Majority of CEOs are older too. I wonder how much this influences a persons ability to pivot. When certain things work well for you for 20+ years. It can be hard to change when those very fundamental things need changing. Whereas a younger ceo might be more willing to experiment (and possibly fail)
breakpointalpha 9y ago
I think the bigger story here is the NYC Pension fund holding $895 million in FB stock. http://www.pionline.com/article/20180330/ONLINE/180339994/nyc-comptroller-calls-on-facebook-to-improve-transparency-accountability http://www.pionline.com/article/20180330/ONLINE/180339994/ny...
- dragonwriter 9y ago
  The NYC pension funds total nearly $200 billion. https://comptroller.nyc.gov/services/financial-matters/pension/asset-allocation/ https://comptroller.nyc.gov/services/financial-matters/pensi...
natecavanaugh 9y ago
Personally, I think it's unwise to bet against Zuckerberg, and here's why I think so. He has struggled with the Peter Principle, and IMHO beat it, which I gotta say is not an easy feat. But he also bet big on things most wouldn't. FB has gone though crazy struggles before, but if my understanding of both PG and YC is correct, you bet on the people, not the product. I have a feeling that if FB Inc has to reinvent itself, it will manage to do so.
tomglynch 9y ago
That's it for me, I'm off Facebook. This is one area where I see the importance of decentralisation - giving this much data to one company is dangerous. I'm part of the crypto-space and having a look there are quite a few competitors to facebook close to launching (sociall.io, indorse.io, steemit). Hopefully one of these will take down facebook. Data being owned by each individual will ensure a catastrophe like this one will never occurs again.
feelin_googley 9y ago
"Muzard warned that Zuckerberg is personally vulnerable if the "crisis of confidence lingers on. He might find it hard to hold on if shareholders start getting out. Things can happen very quickly. His equivalent at Uber did not survive a series of crises, and because Zuckerberg personifies Facebook there is no real fall guy to take the bullet for him." He is therefore taking a big gamble by agreeing to testify before the US Congress, even if Facebook has also ramped up its lobbying of politicians. ... "He must also have the right physical posture and tone of voice. Even with the best preparation, it will be a physically and emotionally exhausting," he predicted." Source: https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-down-for-handling-of-data-scandal-20180401 https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-do...
BrandonMarc 9y ago
Sharks smell blood in the water.
WheelsAtLarge 9y ago
Zuckerberg controls the voting stock. He's not going anywhere unless he wants to go. He's one of the few CEO's that has that much control over his company.
ssaew333 9y ago
Yeah Mark's getting older, and we all know young people are just smarter. Time to shake things up. /s

73 points by rakibtg 9y ago

deleted 9y ago

[deleted]

Save you the click - it's the comptroller of NYC who represents a pension fund. Not sure whether he qualifies as an "investor".

nacho2sweet 9y ago
I mean I was guessing "What is Carl Icahn up to now?".
maxxxxx 9y ago
Why would he not qualify as an investor?
- vasco 9y ago
  Not his money.
  - andrewjl 9y ago
    That disqualifies every institutional investor from being called an investor
    - maxxxxx 9y ago
      Yep.
    - abritinthebay 9y ago
      Unless they are officially speaking on behalf of the fund... yep. It doesn’t appear that this guy was speaking on behalf of the pension fund, just personally, so really he isn’t an investor.
      - maxxxxx 9y ago
        A lot of VCs aren't investors either by that definition.
      - andrewjl 9y ago
        I don't know about that. Institutional investors have a raft of obligations to their clients, including not doing things like intentionally making their investment go down in value. This is a complicated topic, hence why securities law is a thing, but I wouldn't dismiss something an institutional investor says just because they're not speaking officially. It's still their career, investment track record, and client obligations on the line.
dragonwriter 9y ago
The pension fund obviously counts as an investor, and if he is speaking in his role as a representative of that fund, it is an investor speaking (the fund), whether or not he individually counts as an investor in Facebook (which presumably he doesn't, because conflict of interest codes would probably then prevent him from also being involved with investments in the firm on behalf of the public pension fund.)

debt 9y ago

I don't disagree. I think Zuck is the face of the Facebook brand, but I don't think he's the right guy to run a company of this size. He was instrumental in two great acquisitions: WhatsApp and Instagram. Other than that, many of his initiatives are nearly complete failures: Internet.org, Facebook drone internet, Oculus, Portal, Facebook Phone, the developer program, the cloning of Snapchat, his own national press tour, etc. Not to mention, he's had numerous serious public-facing, brand-devaluing flubs that are literally too innumerable to list here. For some reason, he doesn't surround himself with the best people anymore. I think because he's surrounded by an army of comms/PR people rather than actual scientists and engineers at this point.

camillomiller 9y ago
The cloning of snapchat has succeded though, Instagram is doing great and it’s actually stealing users from that platform
- debt 9y ago
  I agree it was a business success. It's just not very innovative. But in business a lack of innovation is sign of decline. It signals to people that a company has become reactionary rather than revolutionary. I don't know if it matters, but it could be a cause for concern.
  - EpicEng 9y ago
    I'm fairly certain you would characterize nearly all of the world's largest and most successful companies as "not innovative" and therefore on the decline.
  - camillomiller 9y ago
    Samsung. :)
sidlls 9y ago
Actual scientists and engineers (I'm both of these) often are too narrowly focused on their own interests to be good at business at the scale of Facebook (or anything else for that matter). Scientific and engineering acumen are signs of intelligence, but not indicative of being "the best" in most contexts.

camillomiller 9y ago

Regardless of who’s giving the advice, it’s actually good advice. The guy has completely lost touch with reality. His comments on Apple and Tim Cook (who has never attacked Facebook directly, just replied to a specific question) show that he’s also losing the needed institutional composure his position requires. Personally I thing his argument (we profile you for advertising ‘cause that’s the only way to give a service to poor people as well) is utter BS.

josefresco 9y ago
> who has never attacked Facebook directly, just replied to a specific question Both of them "sideswiped" each other. > The guy has completely lost touch with reality This is true.
nostromo 9y ago
It's interesting Zuckerberg called Cook's comments glib... right before claiming that Facebook is free because it cares about poor people. Zuckerberg clearly won the glib prize in this exchange.
pinewurst 9y ago
There's a big difference between posters on the side of a city bus and Facebook surveillance. Zuckerberg is trying to obscure that difference as "nothing wrong with being advertising supported".

pnloyd 9y ago

Question for anyone who knows the answer. Is there any legal way to force a majority controlling shareholder to do anything? I've read about Larry Page and Sergey Brin regularly ignoring shareholder requests to relinquish some of there powers over Google.

mullen 9y ago
Nothing they can do. Facebook stock is separated into "has 10 votes" and "has 1 vote". Mark owns the majority of the "has 10 votes" stock. He can literally do anything he wants with Facebook and there is nothing anyone else can do about it.
- ballenf 9y ago
  There are always limits. Every state has minority shareholder rights, even if the barrier to raising a claim is high. The other, maybe obvious, area where the majority shareholder's authority is with regard to illegal acts. This is grayer than it seems in complex regulatory environments. The practical approach is to get New York or California state legislatures to pass strict privacy controls. (I will then get a cheap post office box in that state and "move" my account under those restrictions on any platform that has much of my data.)

poooogles 9y ago

>We’re not trying to harm Facebook, we’re trying to make it a stronger company. Ha. That's a statement and a half. Does answering to shareholders make your company stronger? Lots would argue that too many shareholders focus on short term growth over long term strategy.

eganist 9y ago
In fairness, it's the manager of the NYC pension fund, so there might be more incentive for long term strategy as part of his remarks.
dragonwriter 9y ago
> Lots would argue that too many shareholders focus on short term growth over long term strategy. Large public pension funds are, however, not the kind of shareholders at which that criticism is usually directed.

rakibtg 9y ago

From my personal thoughts, Zuckerberg acting like a dictator. It’s shameful seeing how they started to infect the art of creativity. Everything good comes with ethics, clearly @facebook @WhatsApp @instagram are not.

thisisit 9y ago

Parts of yesterday's Zuckerberg interview [0] highlighted and commented by Matt Levine today [1]: Zuckerberg: You mentioned our governance. One of the things that I feel really lucky we have is this company structure where, at the end of the day, it’s a controlled company. We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time. Klein: That is one of the ways Facebook is different, but I can imagine reading it both ways. On the one hand, your control of voting shares makes you more insulated from short-term pressures of the market. On the other hand, you have a lot more personal power. There’s no quadrennial election for CEO of Facebook. And that’s a normal way that democratic governments ensure accountability. Do you think that governance structure makes you, in some cases, less accountable? Zuckerberg: I certainly think that’s a fair question. My goal here is to create a governance structure around the content and the community that reflects more what people in the community want than what short-term-oriented shareholders might want. And if we do that well, then I think that could really break ground on governance for an internet community. But if we don’t do it well, then I think we’ll fail to handle a lot of the issues that are coming up. [0]: https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-facebook-interview-fake-news-bots-cambridge https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-facebo... [1]: https://www.bloomberg.com/view/articles/2018-04-03/it-s-just-another-day-at-the-office-for-spotify https://www.bloomberg.com/view/articles/2018-04-03/it-s-just...

heisenbit 9y ago
These responses are quite revealing. Control is with Zuckerberg who has the best interest of the community in mind (right, giving liberal access to data and allow microtargeting to an extent that baffles everyone). It also raises the serious question whether Zuckerberg truly understands governance.

tschellenbach 9y ago

I think the author really underestimates how hard it is to stay relevant as a social network while trends and attitudes shift. So far Facebook's continued success has been pretty impressive. Some examples of great moves: Adopting oAuth to make Facebook the backbone of auth on the web, buying instagram when it was small, moving the company to be mobile first, buying whatsapp and making messenger a world class experience and now integrating the best features of Snap to counter that threat. The focus on messaging was especially brilliant given the current trend that people are moving away from social to a more messaging focused experience. It's pretty amazing strategy regardless of how you feel about Facebook's recent issues. I would wager that >99% of CEOs would have failed to spot those trends in time and stay relevant.

Namrog84 9y ago
Majority of CEOs are older too. I wonder how much this influences a persons ability to pivot. When certain things work well for you for 20+ years. It can be hard to change when those very fundamental things need changing. Whereas a younger ceo might be more willing to experiment (and possibly fail)

breakpointalpha 9y ago

I think the bigger story here is the NYC Pension fund holding $895 million in FB stock. http://www.pionline.com/article/20180330/ONLINE/180339994/nyc-comptroller-calls-on-facebook-to-improve-transparency-accountability http://www.pionline.com/article/20180330/ONLINE/180339994/ny...

dragonwriter 9y ago
The NYC pension funds total nearly $200 billion. https://comptroller.nyc.gov/services/financial-matters/pension/asset-allocation/ https://comptroller.nyc.gov/services/financial-matters/pensi...

natecavanaugh 9y ago

Personally, I think it's unwise to bet against Zuckerberg, and here's why I think so. He has struggled with the Peter Principle, and IMHO beat it, which I gotta say is not an easy feat. But he also bet big on things most wouldn't. FB has gone though crazy struggles before, but if my understanding of both PG and YC is correct, you bet on the people, not the product. I have a feeling that if FB Inc has to reinvent itself, it will manage to do so.

tomglynch 9y ago

That's it for me, I'm off Facebook. This is one area where I see the importance of decentralisation - giving this much data to one company is dangerous. I'm part of the crypto-space and having a look there are quite a few competitors to facebook close to launching (sociall.io, indorse.io, steemit). Hopefully one of these will take down facebook. Data being owned by each individual will ensure a catastrophe like this one will never occurs again.

feelin_googley 9y ago

"Muzard warned that Zuckerberg is personally vulnerable if the "crisis of confidence lingers on. He might find it hard to hold on if shareholders start getting out. Things can happen very quickly. His equivalent at Uber did not survive a series of crises, and because Zuckerberg personifies Facebook there is no real fall guy to take the bullet for him." He is therefore taking a big gamble by agreeing to testify before the US Congress, even if Facebook has also ramped up its lobbying of politicians. ... "He must also have the right physical posture and tone of voice. Even with the best preparation, it will be a physically and emotionally exhausting," he predicted." Source: https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-down-for-handling-of-data-scandal-20180401 https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-do...

BrandonMarc 9y ago

Sharks smell blood in the water.

WheelsAtLarge 9y ago

Zuckerberg controls the voting stock. He's not going anywhere unless he wants to go. He's one of the few CEO's that has that much control over his company.

ssaew333 9y ago

Yeah Mark's getting older, and we all know young people are just smarter. Time to shake things up. /s