Question

1. Who started Facebook? How old was he then? Now? How much control does the founding CEO have over his firm? Why? Why was he able to demand and receive control of Facebook, even as the firm went public? What strategic factors were at work in Facebook’s rise that gave the founder such leverage? Who is Facebook’s COO? What is that person’s role, responsibilities, and accomplishments?

Answer 1

Q1. Who started Facebook?

Ans: Facebook was started by Mark Zuckerberg with his college roommates and fellow Harvard University students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes.

Q2. How old was he then?

Ans: Mark Zuckerberg was 19 years old when he started Facebook. He was born on 14 May 1984 and Facebook was launched in Feb, 2004.

Q3. How much control does the founding CEO have over his firm?

Ans; With 2.2 billion members, Facebook is said to be larger than any single nation, language or even religion. And Mark Zuckerberg is in control of 88.1 of the company’s voting shares and his power remains leviathan. Though, Facebook may be a publicly-traded company, but Zuckerberg decides what will be the rules of the game.

Q4. Why?

Ans; Mark Zuckerberg owns only about 10% of Facebook but he controls about 88.1% of its voting shares which is because Facebook offers a dual-class stock structure that makes Zuckerberg's shares more important than normal investors.

Facebook has divided its shares into two classes; Class A shares are those that belong to normal investors and they’re one vote per share. The Class B share is elite class shares which are controlled by Zuckerberg and his small group of investors and every Class B share gets 10 votes.

Q4: Why was he able to demand and receive control of Facebook, even as the firm went public?

Ans; Because Facebook has a Dual-class stock structure wherein shares that belong to Zuckerberg and his league have more weight than those which belong to normal investors, Mark Zuckerberg retained control even after it went public because Zuckerberg decides the rules of the game. Mark Zuckerberg controls 88.1% of Facebook’s Class B shares, with each offering 10 votes at the annual general meeting which are in total 3.98 billion votes overall. Normal Investors own only 2.4 billion shares. So any decision that Mark Zuckerberg doesn’t like or sees bad in taste to his empire is bound to fail by nearly a 2-1 margin.

Q5; What strategic factors were at work in Facebook’s rise that gave the founder such leverage?

• Dual-class stock structure.
• Maximum Voting rights.
• Minimum Number of Class A shares and zero representation
• Poor Corporate Governance and Checks and balances.

Q6; Who is Facebook’s COO? What is that person’s role, responsibilities, and accomplishments?

Ans; Sheryl Sandberg is the COO of Facebook. Her daily role includes, preparing strategies related to expansion, growth,  focusing on strategic business units, working with Governments on ensuring data protection. Sandberg's role includes overseeing the business operations including sales, marketing, business development, human resources, public policy and communications.

Accomplishments:

• As Chief Operating Officer at Facebook since 2008, she helped Facebook to recoup from a $56 million loss to $22.1 billion in profits in 2018.
• Helped build Facebook's mobile business and hit 1.1 bn daily mobile active users in 2016, which comprise 90% of its users.
• Led Facebook is revamping its mobile ads strategy, bringing $8bn in revenue.  
• Helped grow the team from 260 to 17k within 9 years.

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