Facebook looks at China, Zuckerberg packs bags

SAN FRANCISCO/NEW YORK Fri May 20, 2011 3:13am IST

Facebook CEO Mark Zuckerberg addresses the audience before the start of a town hall meeting with U.S. President Barack Obama at Facebook Headquarters in Palo Alto, California April 20, 2011. REUTERS/Jim Young

Facebook CEO Mark Zuckerberg addresses the audience before the start of a town hall meeting with U.S. President Barack Obama at Facebook Headquarters in Palo Alto, California April 20, 2011.

Credit: Reuters/Jim Young

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SAN FRANCISCO/NEW YORK (Reuters) - Facebook CEO Mark Zuckerberg is planning to make his second visit to China as the world's No. 1 social networking company looks for the best way to expand into that country.

"Our company mission is really clear, which is we want to connect the whole world," said Facebook Chief Operating Officer Sheryl Sandberg at the Reuters Global Technology Summit on Thursday. "And it's impossible to think about connecting the whole world right now without also connecting China."

Sandberg also described a public offering of Facebook shares as "inevitable," though she declined to provide details on when Facebook expects to have an IPO.

"It's a process that all companies go through. It's an inevitable process for us, the next thing that happens," she said. "People used to ask us if we were going to get sold. People have stopped asking that question -- we're not ... No one is buying us, we're going public."

The comments came as LinkedIn, a social networking site for professionals, made its debut on Thursday as a publicly traded company, whose shares more than doubled.

Sandberg said the LinkedIn IPO validated the importance of the business behind social networking.

Founded in a Harvard dorm room in 2004 by the now 27-year-old Zuckerberg, Facebook threatens Internet companies like Google and Yahoo as it becomes a popular online destination for Web surfers and an important marketing channel for advertisers.

In the first quarter, Facebook accounted for nearly one-third of the graphical, online display ad impressions in the U.S. according to research firm comScore.

"We are becoming core to people's advertising strategy and their advertising buy, going from spending tens of thousands to the millions to bigger than that. We have hundreds of thousands of advertisers," Sandberg said, though she declined to provide specific revenue figures for Facebook.

Since she joined Facebook as COO in March 2008 to oversee sales, marketing and business development, Sandberg, 41, has turned the website into a multi-billion dollar business.

A former Google sales executive who also served as chief of staff to former U.S. Treasury Secretary Lawrence Summers, Sandberg is credited with bringing valuable business experience and organizational discipline to the company.

There have been reports that the two executives had different views about entering China.

"Despite what you may have read, Mark and I actually really agree on the importance of China," Sandberg said.

China, the world's largest Internet market by users, represents an attractive frontier for Facebook, which is blocked there. Zuckerberg visited China in December and met with the heads of Chinese Internet companies including Baidu Inc, Sina Corp and Alibaba Corp.

But China, where the government exercises tight control over online information, has proven hard to crack for Western Internet companies. Last year, Google partially withdrew from China following a spat over online censorship and cyber attacks that Google said originated in China.

On Wednesday, eight New York residents sued Baidu and the Chinese government, accusing the search engine of censoring pro-democracy speech.

Sandberg said the timing and the agenda of the trip was undetermined, but that Zuckerberg, who is studying Chinese, would probably return this year.

"We don't know exactly what he'd do, but certainly engagement is really important. Plus, Mark really likes tech entrepreneurs," she said. "He likes meeting with them always, everywhere he goes."

Facebook is expected to generate roughly $4 billion in ad advertising revenue in 2011, up from $1.86 billion a year earlier, according to market research firm eMarketer.

Some industry observers have speculated that Facebook could eventually begin serving ads on third-party sites, perhaps using its "like" buttons on websites as a vehicle for ads.

But Sandberg said no.

"We're not working on an ad network right now. We have a lot of growth in our own inventory, our own pages," she said.

(Editing by Robert MacMillan)

(For other news from Reuters Global Technology Summit, click here)

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