Harvard Dropout Keeps Chin Up and Tight Hold on Facebook
WebiMax Contributor, February 3, 2012
Some people lose face as a result of dropping out of school but Mark Zuckerberg transcends the mold of some; he's the CEO of Facebook, a company that filed for $5 billion (with a 'b') IPO on Wednesday. While he's distinguishable from most 'dropouts,' he's also distinguishable from most CEOs and 'business-minded' company figureheads; for instance, Zuckerberg has been known (especially in Facebook's beginnings) to forego immediate revenue for control.
He's so focused on control he has arranged Facebook ownership to ensure his unwavering command. By the time of the social media site's IPO, Zuckerberg had arranged to maintain one-fourth of company shares. Additionally, he made 'friendly' negotiations with investors, enhancing his voting power to reflect almost 60% of total shares. As the New York Times article reflects, that' more control than Bill Gates had during Microsoft's 1986 IPO (he had 49 percent) and Google's cofounders had in 2004 (16 percent each). Traditionally, fresh-faced entrepreneurs have smaller investments and less say regarding their companies.
As anyone who has watched his personality's depiction in the film, The Social Network knows, Zuckerberg is comfortable facing scrutiny. His degree of 'control' is met with some objectors; as one University of Delaware professor offers in the Times article, "You're willing to take someone's money but not willing to invite participation. It makes meaningless the notion of investor democracy." Is Zuckerberg, the head of the biggest social site (800 million active users and rising) in the land, not interested in 'sharing' control?
His stock and control 'arrangements' are not so uncommon; Google and the New York Times have orchestrated similar structures. Additionally, aside from Zuckerberg's core personality, maintaining control is a sentiment advised by his peers as well. Sean Parker, a close and experienced adviser to Zuckerberg, advised him on the subject in 2005 when a stream of investor capital put the two in a position to make decisions regarding 'board seats.' Parker insisted himself and Zuckerberg control three of the five seats. When Parker left the company, he insisted that "no one" (except Zuckerberg) could take the seat because as Parker put it, "…he's the only one I trust to steer the company."
Perhaps Zuckerberg, the one who has championed his idea and its potential from the start, knows what he's doing and should maintain control. In the beginning, Zuckerberg envisioned Facebook being "…the first place people went to in the morning and the last thing they went to before they went to bed." Can you relate to his primary visions? Many people can. Maybe Zuckerberg has observed the post-IPO behavior of other brands and CEOs; David Sacks, formerly of PayPal, admits there were negative sides of the company's public offering, stating in-house employees became obsessed over stock value and the overall brand experience ongoing anxiety regarding investor expectations.
As Facebook must face its immediate IPO, bringing with it a whole new bunch of financially-minded friends, the world awaits its effect and affect on the brand. Thus far, we have to give Zuckerberg credit for growing the social media empire and maintaining tight control of its reigns. Even Zuckerberg knows nothing lasts forever; recently Facebook had to consider what happens after death. As for the throne, after Facebook's 'prince' sheds these 'mortal coils,' Zuckerberg has that covered too. The fine print in the IPO designates Zuckerberg in control of electing a successor "in the event that Mr. Zuckerberg controls our company at the time of his death."