Facebook sans Sandberg is more vision than company



WASHINGTON (Reuters Breakingviews) - Sheryl Sandberg’s exit https://www.facebook.com/sheryl/posts/10166258399565177 from Meta Platforms comes at a bad time for the Facebook parent. While the social network had problems under its departing chief operating officer, it at least had a business model and a top-tier executive who could sell it to investors. Both of those will be hard for co-founder Mark Zuckerberg, whose ambitions lie in more abstract directions, to replace.

Since Sandberg started at the then-startup in 2008, Facebook has grown prodigiously – from $272 million of revenue then to $118 billion last year. That’s mostly down to selling advertising. Sandberg had previously been in charge of online sales at Alphabet’s Google before she joined. She also helped Facebook navigate a boycott by major companies like Ford Motor and Adidas in 2020 without revenue shrinking, and the hit from Covid-19. Facebook is now just behind Google for U.S. online ad market share at about 24%, according to eMarketer. 

But challenges have mounted under her watch. First, that ad engine is already slowing. MoffettNathanson reckons Google’s online ad sales will increase 16% this year, while Facebook is expected to squeak by with 2%. The company has slowed hiring and investment and faces increasing competition – both for ads and users – from Chinese-owned TikTok. Sandberg and Zuckerberg failed to stop the platform being used for foreign interference in U.S. elections and the planning of last year’s riots at the Capitol building. Facebook’s user base also contracted for the first time ever at the end of 2021.

Sandberg takes with her two things Meta still needs. One is Washington experience: she was chief of staff for former Treasury Secretary Larry Summers and took a hands-on approach to engaging with regulators, though that didn't stop Facebook from being a target. The other is financial credibility. Zuckerberg’s focus on augmented and virtual realities is visionary but highly uncertain from an investor’s perspective. The company spent $10 billion on the so-called metaverse in 2021 and says the unit will lose money for some time. Sandberg’s replacement, Javier Olivan, is an expert in products, not finance.

Meta shares had barely moved by the end of Wednesday’s trading. But the company’s stock is already down more than 43% over the past year. The Nasdaq 100 index is down just 8% over that time, and Alphabet shares only half that. That shows that while Sandberg’s departure may not bring new problems, she’s leaving when the company still lacks solutions to its existing ones.

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Sheryl Sandberg, Meta Platforms’ chief operating officer, said on June 1 that she will be leaving the company in the fall after 14 years.

She said she will remain on the board and will focus on her foundation promoting women’s issues.

Separately, Meta Chief Executive Mark Zuckerberg said Chief Growth Officer Javier Olivan would replace Sandberg.

(Editing by John Foley and Amanda Gomez)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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