Facebook CEO Mark Zuckerberg has made the most of a trying time.
August 21, 2021
There are about 6,000 companies that trade on the NYSE and Nasdaq. It is impossible to judge these CEOs against their peers with so many public companies, primarily because their actions now can not always be thoroughly evaluated until years later.
With this important caveat out of the way, I would nominate Facebook (NASDAQ: FB) CEO Mark Zuckerberg for skillfully navigating his social media empire through trying times. Last year, Apple (NASDAQ:AAPL) announced it would change its iOS privacy policies. Enacted earlier this year, the change affects iPhones’ identification for advertisers (IDFA), which allows digital advertisers to track user activity across their phone’s apps. Under the old iOS rules, users had to dive into their phone’s settings to opt-out of this tracking. Under the new policy, users would have to opt into this tracking intentionally.
While Facebook seems to be navigating this change fine, and I believe it will emerge relatively unscathed, it again highlighted that Facebook is not entirely in control of its destiny. The company’s apps are built on top of other platforms, primarily Alphabet’s (NASDAQ: GOOGL)(NASDAQ: GOOG) Android and Apple’s iOS.
Zuckerberg has taken extraordinary steps to make sure Facebook will not always remain in this vulnerable position by devoting many resources towards owning the next computing platform. In the company’s 2020 Q4 conference call, he stated:
If you look at the history of computing, every 15 years or so a new major platform emerges that integrates technology more naturally and ubiquitously into our lives — starting with mainframes, then PCs, then browser-based computing, and then mobile. I believe that the next logical step here is an immersive computing platform that just delivers this magical sense of presence — that you’re really there with another person or in another place. Our phones can’t deliver this, and neither can any other technology that has come before it. This is going to unlock the types of social experiences I’ve dreamed about building since I was a kid, and it’s what we’re building towards at Facebook Reality Labs.
Facebook Reality Labs is the company’s division devoted to virtual and augmented reality. In 2017, the division employed about 1,000 engineers and developers. Today the number is closer to 10,000, a tenfold increase in just four years! It’s not a coincidence that Facebook’s Oculus sales have taken off, a recent recall speedbump notwithstanding. Facebook’s Other Revenue, where Oculus revenue is accounted for, has exploded in recent quarters. Through the first six months of 2021, Other Revenue has grown to $1.23 billion, an 85% increase over the 2020’s first half.
Zuckerberg has even said that the metaverse is the “next chapter” for Facebook as a company. In the future, he adds, people will see Facebook as primarily a metaverse company, not a social media company. In the company’s 2021 second-quarter conference call, he continued:
I see our focus here as a continuation of our work to build technology that brings people together. In many ways, the metaverse is the ultimate expression of social technology. Some of the experiences I’ve dreamed of building since well before I started Facebook are only starting to become possible now. If you look at the investments we’ve made over the years, you can see this vision gradually starting to come into focus, and you can see why we’re so excited about it.
For having the wherewithal to see the company’s vulnerability and the vision to see how to pivot, even during political and antitrust turbulence, Zuckerberg is my nominee for CEO of the year.
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