Last year we interviewed Facebook COO Sheryl Sandberg at the World Economic Forum in Davos, Switzerland. This year we interviewed her again. Notably, this time I brought a tripod with me and didn’t cut off Sheryl’s forehead.
A year ago Facebook had 150 million users, and more than 200 million people visited the site monthly. I noted “You realize it’s like 1 in 5 people in the world that are on the internet visit Facebook.” Sandberg replied, joking “So we have 4 in 5 more to go.”
The thing is, they’re well on their way to getting those other 4. Facebook has more than doubled in size to 350 million registered users in the last year. By this summer well over half of all Internet users will likely visit Facebook each month.
What’s more dramatic – Half of all registered users still log in to Facebook every day, says Sandberg in the interview. That’s 175 million people. And that doesn’t include Facebook Connect logins, only those people that visit the Facebook website.
Facebook continues to limit the number of friends any individual can have to 5,000. Last year Sandberg said that users would eventually be able to have any number of connections on Facebook. She said “I’m not going to give you a specific date, but I will reinforce the message that this is coming..we’re not providing that functionality and we think that’s important so we are working on this and we’re working on it currently. We look forward to your having 80,000 friends… 100,000 friends.”
This year, when I noted that users are still limited to 5,000 friends, she admitted “I failed you miserably,” and wouldn’t say if or when the limit might be eliminated. She did note that pages have no limit on fans, though.
I also asked Sandberg about her views on how the tech community should respond to allegations of Chinese government sponsored hacking and censorship. Facebook doesn’t currently operate behind the Chinese firewall, although the site is available in Chinese. Sandberg’s response:
It’s a hard question and everyone knows it’s a hard question. China is an important market, it’s a growing market and there are a lot of people that live there. And so when you provide a service, you provide a great service, you want the rest(ph) of the world to use it. And when you think about our mission, we want to connect everyone in the world. Connecting everyone in the world without China is not connecting everyone in the world. And I think that when you do go into China, you have to figure out how to work with the government, that’s very clear. When you go anywhere in the world, you have to work with the government and that’s poses different issues for different models. For us right now, we launched in Chinese. We are not easily accessible if you’re in China, very hard to access us and we haven’t figure out what our plans would be at. So, we’re still thinking here all the issues. It’s complicated.
I was unable to get Sandberg to give me a direct answer on who she thinks competes with Facebook. But she did say that she hopes to integrate with her competitors broadly via Facebook Connect. They’ve certainly made progress there.
At the end I asked Sandberg what her biggest regret was over her last two years with the company. Her response – “I would still like to see us move faster.”
Facebook’s competitors, ranging from Google to Twitter and just about everyone in between, would probably like to see Sandberg do exactly the opposite of moving faster.
The full transcript is below, courtesy of PhoneTag.
Mr. MICHAEL ARRINGTON (Founder and Co-Editor, TechCrunch): I’m here with Sheryl Sandberg, the COO of Facebook. Hello, Sheryl.
Ms. SHERYL SANDBERG (COO, Facebook?): In our annual-
Mr. ARRINGTON: Or traditional.
Ms. SANDBERG: Traditional and annual.
Mr. ARRINGTON: Yeah, second annual.
Ms. SANDBERG: Second annual at Davos.
Mr. ARRINGTON: Davos interview.
Ms. SANDBERG: Interview.
Mr. ARRINGTON: Yeah.
Ms. SANDBERG: With a flip(ph) phone. It’s a TechCrunch flip phone, I noticed it’s branded.
Mr. ARRINGTON: This year, your forehead is not cut off. And I have a tripod.
Ms. SANDBERG: It’s very, very exciting.
Mr. ARRINGTON: And so the production value of the TechCrunch is going up significantly.
Ms. SANDBERG: Very exciting.
Mr. ARRINGTON: So, we just have a few minutes of your time and I appreciate it. I know you’re running between meetings. Few questions. First of all, Davos is here. What do you think compared to last year? Last year, you said it was a bit somber, economy was down. What do you think this year?
Ms. SANDBERG: I think in terms of overall economic perspective, it’s more unknown. Unknown. You see, so start to (unintelligible). You see that some people are saying, there’s a real recovery happening and looking forward to growth. Actually, particular focus I think on growth, China, India, Brazil emerging markets and others are saying, we’re not sure. The recession isn’t over. Job loss is a very, very serious issue. A lot of, you know, anger being expressed due to the lack of financial reform that still hasn’t happened. So, I would say, I’ve been here when I thought years were very, you know, sobering(ph).
Mr. ARRINGTON: You’ve been here 10 years now, right?
Ms. SANDBERG: I’ve been here a lot of years. I’ve been here years. Yeah. Where, you know, the world is on fire and, you know, everything is giving up and last year, I would say, the world is about to fall apart. And this year, it’s more moderated. It depends on who you are, where you are, and what you’re specifically talking about.
Mr. ARRINGTON: Did you participate in the panels this year? What were your favorite sessions? What do you think?
Ms. SANDBERG: I did. I participated in a bunch of panelists. This morning, I did a thing on CNBC on how we get corporations to do gender equality and to care about gender equality. And that was actually pretty interesting. I was really impressed with Muhtar, the CEO of Coca-Cola. He said a couple of things that I really do not heard a lot of CEO say. He said that they’re really thinking about how they do. How they catch up real kind of more gender equality and took his corporate ranks. He got an example where there’s a woman he wanted to be (unintelligible) Europe and she (unintelligible) and couldn’t move and he said, traditionally, the career path of Coke is you have to move. And he said, this is going to work. So, we’re going to have, you know, exact, this is going to work. So, she had to stay, I think, it was France. We let her stay. Her team is not there but she is running Coca Cola Europe, obviously a huge (unintelligible). We need to make this work for her. And I thought, I’ve not heard a CEO say that. That was pretty incredible.
Mr. ARRINGTON: Are you joining the board of Coca Cola? You’re on Disney and on Starbucks Board?
Ms. SANDBERG: I’m not joining the board of Coca Cola.
Mr. ARRINGTON: That’ll be a kind of a cool third one
Ms. SANDBERG: I am. I am (unintelligible) sports joining up the Disney work soon.
Mr. ARRINGTON: Last year, Facebook did a bunch of in panel Facebook surveys and you have hundred of thousands of participants. Do Facebook do anything special this year in the event?
Ms. SANDBERG: Yeah. I would say last year, we were more experimenting and we didn’t. This year, we really did this. This year, we did polls at the last discussions(ph) and I think we had over 400,000 users participated in the poll. For me, you know…
Mr. ARRINGTON: 400,000?
Ms. SANDBERG: 400, 000. You know, Davos is a great event and I think an important event for getting world leaders together and corporations and you know, living(ph) in a very global world so keeping everyone together, you know. But, real people, they’re not really invited to Davos. I mean, they try and they reach out and they do a lot of reach out but they’re not here. And so for us being able to bring real people and real users into the Davos experience is incredible. We saw example after example of, you know, panel where experts are sitting there talking about something and they’ll say, what do people think? And we could do that in like 5 minutes and get, you know, 13,000 responses to whatever the question was. It was pretty interesting.
Mr. ARRINGTON: Last year, you had a 150 million users of Facebook when we sat down exactly a year ago. Today, you have- is the last number you announced is 350 million?
Ms. SANDBERG: 350 million.
Mr. ARRINGTON: What’s the office poll(ph) when you hit half a billion? It’s summer, right? Early summer?
Ms. SANDBERG: I don’t know what the office poll is but – and we’re not taking bets but we are really excited that even at such big numbers, our growth is continuing and so continuing to be so strong. As you get big, it sometimes easier to not grow at the same percentages and we are seeing incredible growth. I think, as importantly as a growth, is the continued engagement of our users. When I joined the company, we’re about 70 million and-
Mr. ARRINGTON: Which is two years ago?
Ms. SANDBERG: About two years ago, yeah. Almost two years. And we kept saying, probably 50% of our users come back every day. And you know, I keep telling people, God, stop saying that. Because every Windows(ph) or later adapters(ph) are not as, you know, engage. So, our later adapters are not going to come back everyday or 50% won’t – stop saying that. But, this is Facebook and people do what they believe in, no matter what I think and people kept saying 50% and-
Mr. ARRINGTON: You’ve almost stuck to that, haven’t you?
Ms. SANDBERG: We’re actually still at 50%.
Mr. ARRINGTON: Forrester(ph) said a 130 million people a day sign in to Facebook. So, that’s even higher than that?
Ms. SANDBERG: So the numbers are in the range(ph) of 50 million plus users and 50% comeback everyday, our numbers. 50% come back everyday. And I’ve never seen that and no one I know have seen that-
Mr. ARRINGTON: Does that include your Facebook Connect, by the way?
Ms. SANDBERG: No, that’s Facebook only.
Mr. ARRINGTON: That’s completely separate. Yeah. How many people use Facebook Connect everyday?
Ms. SANDBERG: I don’t know-
Mr. ARRINGTON: That’s on your website actually. It’s like 30 million (unintelligible).
Ms. SANDBERG: Yeah.
Mr. ARRINGTON: Last year, you made me a promise. There has to be at least a couple of hard questions. That soon Facebook users, not fan pages, Facebook users would have the ability to have more than 5000 friends. And that hasn’t happened yet. So-
Ms. SANDBERG: I failed you miserably. I’m here to apologize publicly for our loss. So, what we’ve done already here is we know there’s an issue for people like you who have a lot of followers and more than 5000 people want to see what you have to say. We have made progress on(ph) year is opening up fan pages and giving them a lot more functionality. So one of the reasons when we talked about last year, you didn’t want to switch from having a personal page to a fan pages, you couldn’t, you know, post two users, you cannot reach out two users-
Mr. ARRINGTON: You can have sort of one-on-one communication with-
Ms. SANDBERG: That’s- you could(ph). You couldn’t do any outreach from fan pages last year.
Mr. ARRINGTON: So, now you can.
Ms. SANDBERG: Now, you can. So, now, while we still haven’t got you more than 5000 people on your front page, we’ve opened up fan pages and so that if you- people want to follow you and you want to respond to people and push information to them, you’re able to do that from your front page. So we have that developed.
Mr. ARRINGTON: OK, great. So we’ll have normal user pages more than 5000 friends?
Ms. SANDBERG: I don’t know but they will add more functionality to the fan pages or we’ll do that. Either way, I think the goal is, you know, you want to be able to communicate with people. They want to hear from you. They fanned you. They friended you. We want to enable that in the best way possible. So it’s clearly (unintelligible).
Mr. ARRINGTON: One of the big things here this year is China. And obviously, the Google situation is still playing out. Facebook is still banned in China, is that right? And think of it you’re not behind the firewall.
Ms. SANDBERG: Yeah.
Mr. ARRINGTON: Yeah. I’m not asking any specific question on what Facebook plans are in China. It seems they haven’t changed. But as a sort of a leader in the tech community, what do you think should be our community’s response to China? Should we work with the government as Google tried it and others tried to do? Should we pulled out and wait? What’s the right thing to do as human beings and as businesses?
Ms. SANDBERG: You know-
Mr. ARRINGTON: It’s a hard question.
Ms. SANDBERG: It’s a hard question and everyone knows it’s a hard question. China is an important market, it’s a growing market and there are a lot of people that live there. And so when you provide a service, you provide a great service, you want the rest(ph) of the world to use it. And when you think about our mission, we want to connect everyone in the world. Connecting everyone in the world without China is not connecting everyone in the world. And I think that when you do go into China, you have to figure out how to work with the government, that’s very clear. When you go anywhere in the world, you have to work with the government and that’s poses different issues for different models. For us right now, we launched in Chinese. We are not easily accessible if you’re in China, very hard to access us and we haven’t figure out what our plans would be at. So, we’re still thinking here all the issues. It’s complicated.
Mr. ARRINGTON: Just a couple more questions. I’ve and others have stated that Facebook is clearly on a tear(ph). I mean, you probably don’t have all of the internet users at some point. Last year, you had 1/5. Now, you have 2/5 or more. But one thing is- it’s not clear to me that you’ve monetized well your profit in the business. But if you found what I called the Google moment when Google paired excellent search with amazing, an amazing monetization model to become one of the largest companies in the world. For Facebook to do the same, it seems to me you have to have this some monetization magic. Have you found that yet? Is it a process of tweaking what you have now or you’re still experimenting? How do you bring in the billions or 20 billion in revenue?
Ms. SANDBERG: Yeah. So, I think this was the year that we changed from being experimental ad platform to really being able to go big and we are going big in lots of ways. What Facebook does and I think we do uniquely well which is part of why I’m so excited about the Facebook opportunity when I was offered it two years ago is we’re a place where users express themselves and we’re a place where people share. And when you think about building brands(ph), not just giving someone something they search but before they search. When they’re talking about who they are and affiliating and, you know, finding things typical demand generation, which is still 90% of global ad spenders(ph). I think we’re best property anywhere, with any media to do that because friends want you to affiliate. They want you to say, you know, I am, you know, a Starbucks drinker. I like Starbucks latte and they want you to tell your friends about it.
Mr. ARRINGTON: You still don’t get free Starbucks as a board member?
Ms. SANDBERG: I get no free Starbucks.
Mr. ARRINGTON: Ridiculous.
Ms. SANDBERG: No.
Mr. ARRINGTON: Sorry, but go ahead.
Ms. SANDBERG: But if I wanted to tell everyone I love Starbucks as a board member or not, I will do it on Facebook. And even if I wasn’t trying to do that, if I was just expressing who I am, that’s part of it. And Facebook is a discovery place. You watch your news feed, you’re not going around to look for things even though sometimes you are but your news feed is coming to you. You said, these are the people I want to connect with and they are sharing with me. And that’s a really unique opportunity for brands. You know, the meetings I had at Davos last year were very much- we’re interested, we see, you know, 150 million users we’d like to experiment. The meetings I’m having this year at Davos are very different. They’re saying, we’ve experimented with you, we’ve done some great (unintelligible) in the last year. We’re ready to go big because we really want that kind of very authentic two-way dialogue with our users and we’re excited to help brands do that and help people interact to them in ways that they’re excited about.
Mr. ARRINGTON: So, you like your model? You like your revenue model and now it’s a process of scaling it and convincing one more and more brands to jump on towards (unintelligible).
Ms. SANDBERG: (unintelligible). Because I think that advertising is a great business when done the right way. Advertising that’s interrupted, advertising that’s pushed at you, that’s annoying is not a great model. Advertising which lets you express who you are and then engage in an authentic way is so important. I was just meeting with someone who runs a very important agency and he said what he will use is that right brands of the future are going to be shaped by consumers. What he’s telling his clients is you don’t get to control your brand anymore. You’ve got to work with consumers because they’re going to build your brands. If we are- wait a minute for the noise.
Mr. ARRINGTON: Yeah, yeah. Keep (unintelligible).
Ms. SANDBERG: As I scream, you know, all at Davos. If we are working, if we are going to change the world to take real people and put them into Davos so their voice can be heard. And if we’re going to change the world so that brands have to help and work with people to build their companies and their brands, we think that’s a much better place. And now, we’re starting to do it at scale and I think it’s going to make for better companies, I think it’s going to make for people having better consumer experiences, and I think it makes for great experiences online. So I’m really excited about it.
Mr. ARRINGTON: Who are your competitors?
Ms. SANDBERG: Who are our competitors? A competitive question is always an important one. It’s important for companies to get, right? I think if you draw your focus too narrowly(ph) our competitors, you can get very much blind-sighted by something wrong in company or others are doing. I think you want to think about your competitive case broadly. Well, understanding that you’re working with others to have partnerships. So I think we are competing for how you communicate. We want – when you want to communicate, for Facebook to be the easiest, the most efficient, the most ubiquitous way for you to communicate. I guess that’s a pretty broad communication. Yeah, broad set of competitors, but we’d like to integrate with a lot of this to really make sure that we make it easy to communicate.
Mr. ARRINGTON: So you’re not going to answer that question at all?
Ms. SANDBERG: It’s not an answer?
Mr. ARRINGTON: No.
Ms. SANDBERG: But I talked for a while.
Mr. ARRINGTON: It is an awesome answer, yeah.
Ms. SANDBERG: If I didn’t say anything, is that good? Yeah. No, I’m not going to answer that question. But no one ever answers that question. I’ve seen everyone interviewed here. I’ve never seen anyone answer that question.
Mr. ARRINGTON: No. I thought – you know, I thought maybe you would. But…
Ms. SANDBERG: Try next year. Our traditional annual Davos conversation, you can ask me again who our competitors are.
Mr. ARRINGTON: Two more questions.
Ms. SANDBERG: We will say TechCrunch. TechCrunch will be so big…
Mr. ARRINGTON: That’s right.
Ms. SANDBERG: So they are our competitor.
Mr. ARRINGTON: The TechCrunch threat.
Ms. SANDBERG: The TechCrunch threat to Facebook.
Mr. ARRINGTON: But we’ve already integrated Facebook Connect, so we’ve been board by you, right? So we’re a part of…
Ms. SANDBERG: So it’s become a partnership.
Mr. ARRINGTON: What is your biggest regret in the last two years? What would you go back and do differently as an executive?
Ms. SANDBERG: It’s a good question.
Mr. ARRINGTON: That’s a tough question I throw you without warning, but…
Ms. SANDBERG: No. It’s a good question. It’s a fair question.
Mr. ARRINGTON: Yeah, anything you would have done differently.
Ms. SANDBERG: I think I would still like to see us move faster. I think we move fast.
Mr. ARRINGTON: You mean, in terms of product generation?
Ms. SANDBERG: Yeah, in terms of product generation. I mean, Mark says this all the time, right? The risk of any spaces that we don’t move as that they move too slowly, not too quickly. I think we are moving quickly and I think we’re quicker than anyone. I think we still like to be faster. I would have love to have gotten last year from the experimental part of our brand business to where we are now, which is scaling. I’m excited we’re here now, but would have loved to accomplish that more quickly.
Mr. ARRINGTON: What are you most proud of?
Ms. SANDBERG: I’m most proud…
Mr. ARRINGTON: What have you done in the last two years, when you look back and go, that was awesome?
Ms. SANDBERG: I’m most proud of how Facebook changes lives. I’m most proud of the following example, which hit me because it’s a friend of mine. Her friends, they wanted to adopt a baby and they had a birth mother…
Mr. ARRINGTON: Can you adopt babies on Facebook now?
Ms. SANDBERG: Let me, let me.
Mr. ARRINGTON: I’m sorry.
Ms. SANDBERG: Wait, wait, wait. And they had arranged through an agency with the birth mother and at the last minute, the birth mother changed her mind and wants to keep the baby, which is of course, prerogative in the choice. But for this couple, it was very sad. And they actually wrote on Facebook, they created a page where they really were expressing themselves like, this is so disappointing. We had a nursery, we really want to be parents. We just hope someone else just ask for adoption. And separately, there’s a woman who was looking for a place to give a family to adopt her baby, and she went to the usual process and found it too formal, didn’t find anyone she liked. Found this page, she saw this couple’s desire to have a children and more importantly, saw the community around this couple, saw the friends and the family who are saying we know it’s going to happen for you, we know you’re going to be able to be happy parents and we’re going to be there for you through the experience. And she said that’s where I want my child. I want my child…
Mr. ARRINGTON: And they actually…
Ms. SANDBERG: It’s gone through. The couple has a baby. And what that says to me is that we create community where there wasn’t any, we show people in this very important way the power of what human connection is. We have this page I’m very proud of. I think it’s peace.facebook.com, which you should look at. We’re choosing real-time. Every 24 hours, if personal connections are made between historically conflict groups, so it does Palestinian area and Israel, it does Pakistan and India, it does Muslim and Christian, for example. And you get on there and you know, it’ll say in the last 24 hours, 13,000 connections have been made from Israel to Palestine, 13,000. 13,000 individual people who have connected. You know, if someone else said here it’s really hard to shoot at people you know, it’s just easier to shoot at people you don’t know. And so I don’t claim for a second that we’re going to like create (unintelligible). I’m not that naïve or silly. I think making things more personal makes a huge difference. It’s why, you know, my friend’s friend now has a baby, because they wanted that community. It’s why people are directly connecting in areas of the world where they weren’t before and I’m really proud of that, really proud to just be one of the many people working at this company that’s making that possible. It’s an honor.
Mr. ARRINGTON: All right, we’ll end with that. Thanks very much. I appreciate your time.
Ms. SANDBERG: Thank you. I’ll see you next year.