Sheryl Sandberg is set to exit Facebook at a pivotal juncture
PremiumShe gave its ad model ballast but its latest bet is on the metaverse
Sheryl Sandberg, chief operating officer of Meta Platforms, resigned after 14 years of running the company with Mark Zuckerberg. It was “time to write the next chapter of my life," she said in a Facebook post. Her departure had been anticipated for some time. An investigation last year by the Wall Street Journal analysing internal Facebook data found that the percentage of staff reporting to Sandberg, 52, had been shrinking in recent years. There were also rumours of tensions with Zuckerberg and factional rivalry. Her legacy is mixed. She was pivotal in helping the business reach more than 2 billion active users after Zuckerberg poached her from Google in 2008 to grow Facebook’s ad business. She did so with enormous success: About 97% of its $117 billion 2021 revenue came from selling ads. It made her a billionaire.
But Sandberg’s effort came at a price. For Facebook’s users, for healthy discourse and arguably for democracy itself. Fake news was rampant on the site in the run-up to the 2016 presidential election in which Donald Trump was swept to power. More recently, a whistleblower accused the company of contributing to the 6 January insurrection on Capitol Hill because of underinvestment in safety. For its critics, the company was harming society with its growth-at-all-costs mindset. Some executives who worked with Sandberg have spoken out. Roger McNamee, a Silicon Valley venture capitalist who helped broker her first meetings with Zuckerberg, went on to write “Zucked" and point out that Facebook’s size made it almost impossible to moderate the different languages and cultures of its users.
The co-founder of WhatsApp, Brian Acton, also chafed at Sandberg’s fixation on growth. A few years after he sold WhatsApp to Facebook for $19 billion in 2014, he proposed monetizing the app through a metered use model, charging businesses a fraction of a penny for large numbers of messages. But in a 2018 interview, he recalled Sandberg shooting down the idea. “Her words were, ‘It won’t scale,’" he told me at the time. Advertising was the game.
Yet, Sandberg is leaving just as its money-spinning machine is in doubt. Facebook recently said it would take a $10 billion hit in its 2022 revenue as a result of Apple’s iOS privacy curbs. And Zuckerberg’s pivot to the metaverse has seen Meta spend more than $10 billion on new technology many years away from potential mass adoption.
While Zuckerberg’s own Facebook feed has been filled with updates about the metaverse or skunkwork projects like gloves that can receive haptic feedback so that you can “touch" things in virtual reality, Sandberg has been quiet about it. Her role for years has been to steer the mundane side of the business, while Zuckerberg chased exciting projects. In earnings calls, she often played up Facebook’s contribution to small businesses. She testified before Congress in the place of Zuckerberg and would attend the World Economic Forum at Davos while Facebook’s CEO stayed behind.
A former senior executive at Facebook once told me that the one thing they knew for sure about Zuckerberg and Sandberg was that they would leave the company only if Wall Street wanted them to. That meant a drop in the company’s share price below, say, $100. Meta’s stock closed at $188 on Wednesday, a 50% drop from the $378 level it was trading at last year. Facebook’s market capitalization flirted with $1 trillion at that time, and it’s now hovering around $500 billion. Another key figure in Facebook’s growth story has left too: Peter Thiel, who was Facebook’s first outside investor and a guiding hand for Zuckerberg, recently stepped down from its board of directors after 17 years. Though Zuckerberg has said publicly that he will remain CEO in the coming years, his apparent obsession with virtual reality leaves Facebook looking increasingly rudderless.
Sandberg’s and Thiel’s departures come at a moment of great financial uncertainty for Meta. It’s unclear how the company plans to make money in the metaverse, or how much more the privacy changes from Apple will cost it, or how extensively it might have to redesign its algorithms for users in Europe under forthcoming online safety laws there, potentially hurting its growth prospects. In February, Meta reported its first-ever decline in daily active users, suggesting its business has peaked.
If Sandberg is leaving on a low note, it could have been lower if she had waited longer to depart. The silver lining for users, and perhaps for democracy itself, is that some of the executives who steered Facebook toward an irresponsible scale are finally out. If Zuckerberg ever relinquishes his grip on the company as the majority controller of its voting shares, it raises a greater prospect of new leadership that might prioritize safety over growth. But for now, the company’s future looks ever more uncertain.
Parmy Olson is a Bloomberg Opinion columnist covering technology