MASTERCLASS: Facebook’s Zuckerberg, Sandberg, Wehner share vision of the future
Mark Zuckerberg, who turns 33 next week, was never keen to list Facebook when he did so in 2012. The founder of the social media phenomenon has long been convinced this is a business that will continue to appreciate in value. Just two years after starting Facebook in 2004, he turned down an offer of $1bn from Yahoo. Three years later Zuckerberg allowed Microsoft to acquire a 1.6% stake at a price that valued the company at $15bn. A decade on and the now Nasdaq-listed Facebook shares have a market value of $434bn. Is it worth that much? Homo sapiens find the concept of exponential growth difficult to absorb. And even if one does have a grasp of it, any stock trading on 28 times annual free cash flow seems hard to swallow. Except when it is a company whose revenues are growing at over 50% a year and because of benefits of scale, its profit by even more. The consequence of compounding at this rate is staggering. If Facebook were able to continue on the current path, in just seven years it will generate free cash flow equivalent to the current market cap. Today's buyers believe there's a good chance of that happening. I listened carefully to this week's webcast for professional investors and edited the transcript to make it easier for you to make your own assessment. From the way I see it, the Facebook team have a wonderful grasp of the key issues. And if Zuckerberg is only half right in forecasting the big trends – video moving from TV to mobile; people coalescing increasingly into online groups – Facebook shares will become increasingly valuable into the future. But read it from the horse's mouth and make up your own mind. – Alec Hogg
Mark Zuckerberg, CEO: In my letter to our community back in February, I talked about how, for the past decade, Facebook has focused on connecting friends and families. Now, with that foundation, our next focus will be building community. There's a lot to do here. Building global community is bigger than any one organization, but we can help by developing social infrastructure for community — for supporting us, for keeping us safe, for informing us, for civic engagement, and for including everyone.
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