Zuckerberg Excuses Facebook Profit
Mark Zuckerberg doesn’t care about revenue, and he doesn’t care about profit. That’s the picture of him that was painted in a Wall Street Journal profile on Sunday. The wealthiest young person in the world doesn’t care about money, yet he took his tiny start up from a university project to one of the most talked about companies out there, and one valued at more than $100 billion.
2013 was one of the most significant periods of growth for Facebook Inc (NASDAQ:FB). The company managed to turn the anemic profit it pulled down before going public and turn it into a substantial cash flow with opportunities to grow. That, according to Zuckerberg, was not a result of the profit motive, it was a result of his wish to keep engineers at the company.
Facebook’s Accidental Profit
Many key employees at Facebook Inc (NASDAQ:FB) are also shareholders. The pattern plays out across the tech world where investors prefer to have employees motivated by the success of the company they work for, and companies find it inexpensive to pay employees in stock in its early years. After its problem IPO Facebook shares lost much of their value. Zuckerberg was worried that his engineers would sell up and move on.
In order to avoid that eventuality Zuckerberg decided it was time to make a profit. That’s the way the story is told in the Wall Street Journal piece at the very least. Mark Zuckerberg cares about people, profit was the last thing on his mind at Facebook. It turns out that the incentive to make a profit was the same that allowed the young CEO to care for his employees. Capitalism is wonderful, the corporation is king, and Mark Zuckerberg is a lovely human being.
It’s true that Mark Zuckerberg is probably unconcerned with day-to-day movements in the Facebook share price. It’s not true that he is unconcerned with the company’s share price, nor is it true that he cares little about profit. If Facebook had not turned its stock performance around it is not engineers who would have been forced to leave their positions. The CEO himself may have lost his job.
Facebook Is About Profit
Mark Zuckerberg owns around 28 percent of Facebook Inc (NASDAQ:FB). He does not control the company, and even if he did a widescale shareholder revolt would be too much to bear. Mark Zuckerberg is legally bound to serve the owners of the company he directs. He, and Facebook as a whole, is motivated by profit. There is no need to excuse that fact.
Pretending that Facebook profit was almost accidental does a disservice to those who worked hard to ensure it happened. The image of Mark Zuckerberg finally giving in and allowing his company to make a profit is disingenuous. Facebook is a corporation. It’s job is to make a profit. Nobody should be amazed that that results in people holding onto their jobs, or a rise in stock price. Excuses do not need to be made for the company’s behavior, and they certainly shouldn’t be listened to.
Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.