In Facebook Deal, Board Was All But Out of Picture

http://online.wsj.com/article/SB10001424052702304818404577350191931921290.html

by answerly • 14 years ago

69 49 14 years ago

online.wsj.com

ahsteele2• 14 years ago

Stupid pay wall.

jasondc• 14 years ago

To view any WSJ article, search Google News for the exact title. WSJ has a deal with Google to let visitors view the entire article.

ahsteele2• 14 years ago

Great tip thanks!

Zephyr314• 14 years ago

link: https://www.google.com/search?q=In+Facebook+Deal%2C+Board+Wa...

Schwolop• 14 years ago

Is this only true for US visitors? It still doesn't work for me.

hartror• 14 years ago

Deal? Or is this an artifact that Google doesn't index content behind a paywall so WSJ has to display the whole article to the Google spider and anyone who's refer is Google. If WSJ (or anyone else) doesn't want to lose the search engine traffic they're force to do this.

Horace• 14 years ago

Well, this has been evident for a long time. Mark Zuckerberg intends to rule Facebook, not by consensus, but by himself. When Zuckerberg was forced to make an IPO, he did everything in his power to minimize outside control. I also believe(not sure about this), that Zuckerberg still retains majority control of the company.

primatology• 14 years ago

Yep, he owns 28% of the stock but 57% of the voting rights, according to the article.

Produce• 14 years ago

Just as matter is never created or destroyed but merely changes form, so it is with Steve Jobs.

stfu• 14 years ago

Have to admit that this increases my respect for Zuck. It breaks with the current trend towards this consensus seeking, "collaborative" management ideal, that sabotages bold moves.

andjones• 14 years ago

Full article: https://www.google.com/search?q=In+Facebook+Deal%2C+Board+Wa...

SomeCallMeTim3• 14 years ago

Doesn't work for me; WSJ must have shut it down.

Though Google cache pulled through, at least for now:

http://bit.ly/IIBabu

JoachimSchipper3• 14 years ago

There is no need for shortened links on HN.

guelo• 14 years ago

WSJ seems to have made a recent change to stop the old search-for-the-title-in-google trick. If you visit the article first and then leave and come back with google referers it doesn't work anymore. But if you've never visited the article and you come from google it does show it. Even when you delete your cookies and then try to come via google it won't show the article. That means they're using flash cookies or some other insidious persistent cookie technique. Not sure if this violates Google's terms.

namenotrequired3• 14 years ago

Works for me, thanks! :D

AVTizzle• 14 years ago

Interesting. Kind of touches close to a thought I had when I first heard about the deal... Board aside, what kind of signal did the acquisition send to Facebook's rank-and-file?

There's plenty of extremely talented people who joined the party too late to have any significant options. Now everywhere they go (including home, private, and social lives...) they can't escape hearing about the gold mine that was just dropped on Kevin and crew.

You literally can't escape this news in the connected world. Can't help but wonder if that's weighing on morale at all in there.

namenotrequired3• 14 years ago

Yeah, i don't usually read papers but on the few occasions i did, that week, it was hard to escape :D

spullara• 14 years ago

"Mr. Systrom was just hours from signing a deal for a $50 million venture-capital investment that would put a $500 million value on his company"

So this started before the deal was closed. Did the funding round close?

CaveTech• 14 years ago

Yes, the round closed the day before the acquisition, iirc.

nikcub2• 14 years ago

that makes the IRR a crazy 1.33x10^3175% [1]

funny that they would only need to let their investment ride into equivalent investments for another 21 days before reaching a return of 209 Trillion dollars, which is in excess of the total value of all stocks, bonds and currency in the world.

[1] http://www.wolframalpha.com/input/?i=%3D+%281+billion+-+500+...

ealexhudson2• 14 years ago

I would really be surprised if this didn't affect the IPO. Why would people put money into a business with corporate governance this poor?

staunch4• 14 years ago

You can't say yet whether it was a poor choice. Instagram was a very credible threat to Facebook. Its growth curve and primary use bear a strong resemblance to Facebook's.

People laughed at Google for buying YouTube for $1.65 billion. Now every single big company wishes they had done it instead.

ealexhudson2• 14 years ago

You're missing my point; I'm not questioning the decision but the process, the governance. The board is there to represent shareholder interests, if they get bypassed like this on a decision this big, then what is the point of them being there?

I think it was Sergey Brin who recently said something about an investment in Google being a long-term bet on his/Page's decision making. It's like the world has suddenly forgotten why businesses are structured the way they are.

To make an unrelated, more controversial, point: if a CEO can take arbitrary, unilateral decisions, it's difficult to see why they should benefit from the protection of corporate liability.

dasil0033• 14 years ago

Zuckerberg obviously doesn't give a shit what public investors think, and rightly so. You can't lead a world-changing company in growth stage by kowtowing to what "the market" thinks. Instead he will do what he thinks is best for Facebook, and if it works, the stock price will go up, if it doesn't, it will go down.

stevelochan• 14 years ago

post-IPO, if he simply "does what he thinks is best" without board approval and the stock price goes down, he'll get sued by shareholders

smackfu2• 14 years ago

The IPO structures the company so Zuckerberg has ultimate control anyways. He has 28% of the class B shares (which are 10x the votes of the class A shares being sold in the IPO).

staunch4• 14 years ago

I love what this says about Zuck. It takes real conviction to make decisions this big and this fast. Most people would feel the need to build a faux consensus of people around them for moral support.

Same thing that let him say no to his own $1 billion acquisition offer I suppose.

mkramlich• 14 years ago

He's 26. He went straight from Harvard to Facebook. He still effectively controls Facebook. And he's a billionaire. I don't think he really can take a risk, in the sense that a normal person would think of a risk. As long as he doesn't do something blatantly stupid like run in front of a bus, he's probably set for the rest of his life. Instagram deal not approved, or approved but doesn't "work out"? Shrug. Still a billionaire. And I'm sure he's taken a lot off the table already so even if Facebook's value plummets, he should still be gold.

staunch4• 14 years ago

You think he doesn't have much to lose because at the end of the day he's still a billionaire. I doubt he feels like that. He's got an opportunity to succeed in ways most humans never do. You could argue that he's got more to lose than most, not less.

shn• 14 years ago

I really wonder if there's any favor factor in this deal. The deal is too good to be true.

mrgreenfur• 14 years ago

It's amazing that the Instagram guys started negotiations at $2B. I guess when you're talking to FB you just pick a huge number out of the air. Why not $5B?

Aissen• 14 years ago

It's in the article (see google cache). They were about to be valued at $500M in the next round of investment, during the next week. Zuck had to move fast, and he did. He bought them 2 times the supposed valuation, which is probably what Instagram expected.

(PS: Negotiation 101, start with a number 2x bigger than what you expect)

In Facebook Deal, Board Was All But Out of Picture

Related Stories