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Mark Zuckerberg.
- Mark Zuckerberg has taken responsibility for the Cambridge Analytica scandal.
- Zuckerberg makes mistakes, like everyone else. But a mistake on Facebook has global consequences.
- He can never be fired from Facebook due to the way his stock holdings control the company.
- Zuckerberg thus has a massive amount of power (he even has a direct line to President Trump via board member Peter Thiel) but there is no way to hold him accountable if he makes a mistake.
My colleague Steve Kovach asked Mark Zuckerberg a really interesting question last week. "Has anyone been fired related to the Cambridge Analytica issue or any other data privacy issue?"
Zuckerberg told him, "I have not [fired anyone] due to the Cambridge Analytica situation. We are still working through this. At the end of the day, this is my responsibility. So there have been a bunch of questions about that."
There have indeed "been a bunch of questions about that."
Zuckerberg has fired plenty of people for much more minor offenses in the past. The most infamous firing was in 2015 of a staffer who had the temerity to tell the press that Facebook was working on an electronic personal assistant, named "M." In a meeting, Zuck told his employees that he would find the leaker and fire them. One week later, Zuckerberg reported that the person was terminated. "Many of those in attendance applauded," according to Recode's Kurt Wagner.
When a problem crops up at Facebook and the person taking "responsibility" is not Zuckerberg, firings happen pretty quickly. As a policy, "people are fired at Facebook on a regular basis for not doing our jobs," COO Sheryl Sandberg says. The current scandal regarding the misuse of user data by Cambridge Analytica has been dragging on in public since November 2017, and since 2016 internally at Facebook, according to Sandberg.
"I still think that I'm going to do the best job to help run it going forward"
Yet Zuckerberg still thinks he is the best person to run Facebook. "I still think that I'm going to do the best job to help run it going forward," he told Kovach.
We will never know if there is someone better than Zuckerberg to be CEO because he has structured the stock so that even though the company's shares are owned by the public, they are controlled by Zuckerberg alone via an arrangement in which his stock has super-voting powers that overrule everyone else's. He is also the chairman of the board. Before the scandal erupted, investment bank analysts began to question this structure. Zuckerberg's interests are not the same as stockholders' interests, they argue. Zuck could do things that hurt the value of the company.
And, as he just admitted, he could make mistakes. "That was a huge mistake. It was my mistake," he told Kovach and others last week.
I argued last week that dialing down news on Facebook, and reducing the availability of tools for advertisers, could easily hurt engagement, usage, and revenue at Facebook. That might make Zuckerberg feel better about the impact of Facebook on society, but it could hit the stock and lose people real money.
The stock has lost $50 billion or more in market cap since the scandal started.
Mistakes have expensive consequences in the real world.
By "real world" I mean the internet. People spend more time with Facebook than any other app on their phones. Facebook and Google split between them virtually all new advertising dollars that are spent online. And, as the News Feed algorithm change made clear in the last few months, Zuckerberg can decide whether you see news or not, on any given day.
Zuckerberg controls pretty much half the entire internet, or half your time on it, or half the new money funding it, depending on how you want to slice that.
So, "Mark Zuckerberg makes a mistake" is not a trivial event.
Letting Russian troll factories onto Facebook sure seems like a mistake, although perhaps not from the perspective of Facebook board member Peter Thiel
Reuters
Donald Trump and Peter Thiel.
Remember when Zuck thought the idea that the Russians could covertly use Facebook to influence the US presidential election was "pretty crazy"? And then it turned out that 126 million Americans had seen Russian propaganda, posing as American political ads, on Facebook? We can't say that those ads swayed the election to President Trump. But they certainly didn't make the contest fair.
Letting Russian troll factories onto Facebook sure seems like a mistake in hindsight. Although perhaps not from the perspective of Facebook board member Peter Thiel, who bankrolled Trump's campaign, supported him with a speech at the Republican National Convention, and now advises the president on business and tech issues.
And, oh yeah, Thiel is a board member and investor in Palantir, whose staff helped Cambridge Analytica put together the bogus data-harvesting app that started this whole thing.
So this is all working out rather well for Thiel - his man won - but less so for Facebook and its shareholders. (Zuckerberg has previously defended Thiel from criticism.)
A layperson might regard the Zuckerberg-Thiel-Palantir-Cambridge-Analytica-Trump axis as some kind of conflict of interest at board level, or at the very least the kind of distraction that might bring management and the brand into disrepute.
But this is Facebook, and Zuckerberg can never be fired, regardless of the magnitude of his errors. Let's hope that the man in charge of half the internet learns from his mistakes.
This column does not necessarily reflect the opinion of Business Insider.