How Facebook Has Changed Since Going Public
"Facebook was not originally created to be a company," CEO Mark Zuckerberg wrote in his SEC Registration letter a little more than three months before Facebook went public on May 18, 2012. "It was built to accomplish a social mission — to make the world more open and connected."
In the year since the Facebook IPO, some things haven't changed: Zuckerberg still sports his trademark hoodies, employees still rate their company and their founder highly, and Facebook still talks about its grand mission to make the world more open and connected. But the era of Facebook operating or being perceived as anything other than a corporation seems more distant with each passing day.
Facebook is a company now, a huge corporation in fact, with a market cap of more than $60 billion, a staff of nearly 5,000 employees and an active user base of more than 1.1 billion. Perhaps most importantly, it must now answer to shareholders rather than just users. That simple fact has had a noticeable impact on Facebook, both in terms of how employees operate and the new features that have been released.
More Focus on Making Money
For much of its history, Facebook didn't seem particularly concerned with monetization, but that changed when the company filed to go public. In the same SEC letter, Zuckerberg attempted to position himself as being more interested in making money than some might have assumed before.
"Most great people care primarily about building and being a part of great things, but they also want to make money," Zuckerberg wrote. "Through the process of building a team — and also building a developer community, advertising market and investor base — I've developed a deep appreciation for how building a strong company with a strong economic engine and strong growth can be the best way to align many people to solve important problems."
As it turned out, that wasn't just idle talk. During Facebook's third quarter earnings call in October, Zuckerberg revealed that each of the company's product teams had been charged with coming up with strategies to generate revenue for their respective products. This operational change coincided with Facebook experimenting with a range of new money-making efforts across various product areas.
Facebook started charging users $1 to send messages to the inboxes of people they don't know, and tried out higher price points for sending messages to certain celebrities on the social network, including charging $100 to message Zuckerberg. Facebook also introduced the option for users to pay $7 to "promote" their posts in their friends' News Feeds to improve the chances these updates getting seen — something that used to be a given (and completely free) in the earlier days of the social network.
Then, of course, there are the ads.
Placing Ads Front and Center
Since going public last May, Facebook has introduced mobile app install ads, retargeting ads based on the user's browsing habits, sponsored results in search, a mobile-only ad product and more. There are ads in the right rail, ads in the News Feed and ads in the mobile app, and if recent rumors prove true, soon there will be video ads in the feed as well.
It has now gotten to the point where it's hard to tell whether Facebook's biggest product innovations are designed more for users or for advertisers — chances are, it's probably both.
Facebook started rolling out a completely redesigned News Feed in March, which was presented as giving users more room for images and more ability to organize their feeds. But the company also acknowledged that the redesign would provide more real estate for marketers to serve bigger and richer ads in the News Feed, and industry experts have suggested the redesign will pave the way for the inevitable introduction of video ads.
More recently, the company introduced Facebook Home, a home screen and app launcher for Android that puts activity from the social network front and center on any phone which has Home installed. Zuckerberg said the thinking behind Home was about "putting people first instead of apps," but it also has the potential to serve ads to users on their home screens — something that Zuckerberg said may come to Home down the road.
Becoming a Mobile-First Company
While users may groan at some of these changes, at least one seems to be a net positive for the community: Facebook has become far more focused on mobile.
Facebook was born in the desktop age and had been criticized in the past for its sluggish smartphone apps and decision to focus on HTML5. As Facebook prepared to go public, analysts and investors started to express concerns about the social network's weaknesses on mobile and questioned whether this would hurt its long-term prospects. That pressure appears to have pushed Facebook to take its mobile efforts more seriously.
Facebook re-built its iPhone app from scratch to be faster, and has issued frequent updates to each of its apps in recent months to improve the experience. Inside the company, Facebook has gone to great lengths to ensure that employees stay focused on mobile: At one point, product managers were prohibited from accessing the desktop version of Facebook internally, forcing them to use the mobile site instead, and the company has put up "Droidfooding" posters around campus encouraging employees to switch to Android to better understand the platform.
In Facebook's fourth-quarter earnings report for 2012, Zuckerberg proclaimed that Facebook had officially become "a mobile company." The really striking thing is that it appears to be true. Yes, Facebook still fumbles on mobile from time to time — as shown by the lackluster reception for Facebook Home — but the fact that it is paying attention to its mobile experience is certainly a step in the right direction.
It's not uncommon for businesses to experience an exodus of early hires and top execs after going public, but Facebook's brain drain has been particularly noticeable. In just the first three months after filing its IPO, Facebook lost its CTO, platforms director and the head of its partnership marketing division.
Since then, Facebook has lost several other prominent employees including Joanna Shields, its VP of Europe, Middle East and Africa, its general counsel Ted Ullyot, product director Blake Ross and most recently, its longtime head of communications Larry Yu.
That said, Facebook has continued to poach top talent from other competitors in the tech space like Google and Apple, which is a positive sign.
A More Polished Zuckerberg
It's not just Facebook that has changed; the company's founder has changed, too. While Zuckerberg still dresses casually and talks about the hacker culture from time to time, he has been noticeably more polished when speaking in public post-IPO, whether it's during an interview, a launch event or an earnings call. That's certainly not a coincidence. As AllThingsD reported in September, Zuckerberg now has handlers who help him craft his words and public appearances. Now that Facebook is a public company, every word and gesture from Zuckerberg is scrutinized that much more. After all, there's a lot of money riding on it.