Interesting signals highlighting stress at Facebook, as Matt Cohler joins the list of departures.
Mr. Cohler’s departure comes at a shaky time for Facebook, the pioneering “social-networking” Web site that is currently valued at $15 billion by investors. The four-year old company—founded by Mr. Zuckerberg when he was an undergraduate at Harvard University–is trying to professionalize its management and morph from a youth-oriented chat site into a profitable Internet company.
Ms. Sandberg, for instance, has been rolling out new management and operations procedures, such as guidelines for employee performance reviews, training programs and new recruiting processes. But the company has lost some key executives recently, including Adam D’Angelo, the company’s former chief technology officer, and Owen Van Natta, who served as chief revenue officer and chief operating officer
While departures of early employees are nothing new as companies reach maturity, seeing so much turnover in the early executive ranks after highly publicized recent gaffes at monetizing the property indicate one of two things: 1) the valuation has peaked and better returns lie elsewhere, or 2) culture clash with the new COO.
My bet is on option 1. The Microsoft investment pegged valuation at a lofty $15B and shares will be underwater until the company is able to generate a cashflow to justify the sum. Meanwhile, employee options are no longer a valuable component of the compensation package, reducing the ability to get folks that want to swing for the fences.
This looks to be a morality tale for those who seek to build empires on shaky financial foundations…as Marc Andreeson would tell us, product market fit is most important. And successful revenue model fit with the market is an essential component of how valuable a property can be. How far away are we from seeing AdSense widgets in the right column of all facebook pages?
Recent Comments