The Social

PALO ALTO, Calif.--"The stream of information coming at you can be overwhelming," Facebook Chief Operating Officer Sheryl Sandberg said when asked in an onstage interview what she thinks of social-networking fatigue. "I think people sometimes feel uncomfortable hitting 'ignore' (on friend requests), but if you don't want to connect to someone, that's why it's there."

Facebook, after all, is on top of the world. It doesn't make much difference to the health of that 300 million-member user base if your "social graph" is one degree smaller.

Sandberg, who joined Facebook a year and a half ago after a high-ranking sales job at Google, was interviewed Thursday at the Palo Alto Research Center auditorium by industry analyst Charlene Li. The event had been organized by Silicon Valley networking group The Churchill Club.

Since then, she has become the company's foremost evangelist for some of its most prominent marketing pitches: the power of connectivity, and how Facebook can give businesses a more authentic face. Sandberg had given the talk in New York to debut "BrandLift," the social network's partnership with statistics firm Nielsen to provide audience response to advertisements.

Li's questions for Sandberg weren't particular hard balls. Rather, the interview followed Sandberg's usual talking points for a corporate audience: how Facebook is an unparalleled and unprecedented hub for communication and interaction, and how in turn it has changed marketing and communication--and that there's no other place on the Web for advertisers to get that kind of interaction with consumers.

"There are other places on the Web where you can get reach and audience. Certainly Yahoo offers that...What we have is deep engagement," Sandberg said. "We are by far the place where people spend the most time on the Web. On average, a monthly user on Facebook spends 5.75 hours on the site. No. 2 is Yahoo, and they are at 3 hours and 23 minutes. That is a really big gap."

(Ouch, Yahoo.)

Facebook might be "a marketer's heaven," as Li put it, but Sandberg said it also takes user privacy seriously--another regular and understandable Facebook talking point, considering it's had the occasional privacy snafu in which user backlash has reached a fever pitch.

"Why is our usage exploding, as some of the other social properties are decreasing?" Sandberg asked rhetorically, not explicitly mentioning MySpace, which recent numbers showed has seen much of its traffic eaten up by Facebook's. "We think it's because we made it really safe." She talked about how one of the first things she learned from CEO Mark Zuckerberg was the high number of members who put their cell phone numbers on their profiles. "Facebook is that safe," Sandberg said. "And so we take user privacy as the most important thing we do."

It obviously hopes to continue to get bigger. The company is working on "a deep integration with mobile carriers" to reach audiences that may have access to mobile devices but not PCs, and recently launched its Facebook Lite site "if you are in a country with slow bandwidth and slow loading times...we really wanted to speed it up."

Are advertisers warming up as Facebook's membership skyrockets? "They certainly get it more than they did a year ago," Sandberg said--and indeed, Madison Avenue didn't warm up to Facebook immediately, amid reports that social-network advertising was difficult to harness and even more difficult to profit from. "We're growing our users, and that's helping us a lot, and our ad products have improved tremendously...in a tough economy, advertisers and marketers are looking for value."

At least according to the Valley tech press, the biggest threat to Facebook's dominance these days isn't coming from Microsoft or Google, but from upstart Twitter--which Facebook famously tried to purchase and was snubbed.

She reiterated that while both Facebook and Twitter are "part of the same movement...real-time information shared quickly," that there's room in the field for more than one player and that competition is positive.

She said, though, that she hasn't jumped on the Twitter bandwagon because of what she considers an important differentiation between the two services.

"I don't use it very frequently. I've put, like, two or three tweets up ever," Sandberg said. "I'm not trying to broadcast to the world, I'm trying to share with my friends. It's not what I want to do. Twitter's much more of a broadcast-to-everyone kind of thing."

Pretty much everyone in the audience at Sheryl Sandberg's talk on Tuesday morning as part of New York Advertising Week understood the meaning of the slide she displayed that read "Nielsen and Facebook are in a relationship." A nod to announcements on Facebook's homepage "news feed," the "in a relationship" phrase is now a recognizable slice of Internet culture--much as social network Facebook itself has become ubiquitous.

And Sandberg, Facebook's chief operating officer, hopes it will be just as ubiquitous in the advertising world. Her goal on Tuesday was to formally announce the social network's "strategic alliance" with data and audience measurement firm Nielsen, starting with the launch of a product called BrandLift, a market research tool that can measure audience response to advertisements on Facebook "in a matter of days."

Nielsen Online CEO John Burbank joined Sandberg on stage to detail the basics of BrandLift. "We recognize just how increasingly important Facebook is within the whole ecosystem of media," he said, adding that it would be "crucial in building (marketers') confidence in using the Internet as a tool."

Sheryl Sandberg (file photo)

(Credit: Corinne Schulze/CNET)

Burbank confirmed what he told CNET News last night, that BrandLift measurement would eventually reach beyond the hugely popular social network. "(Brands) have asked us to extend this tool beyond Facebook," he said. "Working with Facebook, we expect to do that, too."

But for now, it's all about the social network. Sandberg pitched Facebook to the ad industry audience, as she has done in the past, as a hub for meaningful connections and communication. "Facebook is where people go when they want to share, when they want to connect, when they want to reach out to the people they know," Sandberg said, and she brought up instances as varied as grassroots activism in Iran and the two girls in Australia who updated their Facebook status messages rather than calling emergency services when they were trapped in a storm drain.

"I thank them, and we're glad, we're especially glad they got rescued," Sandberg said, noting that the girls' choice of crisis communication highlighted just how important Facebook is to personal connections in members' lives. "(But) next time you use emergency services, 911. Better option for sure."

What she also talked about: How fast Facebook has been growing. Last year at Advertising Week, she said, she announced that the social network recently had hit 100 million active users. This month, Facebook hit 300 million. And a full 50 percent of them still return to the site every day, Sandberg said, something that surprised her because she'd assumed that late adopters would be far less active than early adopters.

More numbers: Facebook's mobile applications are used by 65 million people. The average user spends 5.75 hours on the site per month. And the average user now has 130 friends, up from 120 a year ago.

Competition and skepticism
Sandberg had good reason to persistently highlight both Facebook's staggering growth and its newfound cultural significance: The advertising industry simply hasn't had a whole lot of faith in social media. "We've had some stumbles, some of our own making, and I think it's fair to say we have more of our fair share of critics," Sandberg said, mentioning that she'd once gotten a phone call from her parents asking whether she was looking for a new job because they'd read a report that Facebook was running out of money.

Facebook has also had to compete for marketer attention with the (at least for now) more buzzworthy Twitter, which rose to fast fame amid celebrity endorsements, a high-profile role during last year's U.S. elections, and the seemingly ubiquitious placement of "tweets" on cable news programs. A Twitter profile and a Facebook fan page can be directly competing products.

But the real skepticism surrounding Facebook's potential as a moneymaking power--at least as long as it remains supported primarily by advertising--comes about because, at least until this point, there has been a lot of marketing buzz-speak but not a whole lot of concrete numbers to measure its actual success.

"You want measurement, measurement you can rely on, measurement that you believe is valid," Sandberg said. That's why Facebook approached Nielsen as a respected third party, she explained.

Brands have found significant success with Facebook fan pages, which are free to create, she said. But adding paid advertisements through Facebook's "Engagement Ads" product can enhance those brand pages significantly, Sandberg explained. (It also means Facebook gets paid.)

"A year ago we introduced Engagement Ads. Rather than having to go to different sites or go to landing pages, consumers were able to engage with marketers directly with the ads themselves," Sandberg explained. "(They can) RSVP to the event, 'fan' a page, watch a video and comment, send a branded gift, or respond to questions from a marketer." As part of Tuesday's announcement, Sandberg announced that Engagement Ads have been expanded to include an easy way for Facebook members to request free product samples.

There were some skeptical questions from the audience, notably one that inquired about the poor searchability and indexing features on Facebook profiles and fan pages. The audience member asked whether this was potentially being upgraded.

"The short answer, is do we want to take content and make you more easily able to find it, find it now, find it later?" Sandberg responded. "Of course. And it's something we're definitely working on."

Update Tuesday 4:14 a.m. PDT: Facebook and Nielsen have officially announced their multiyear deal.

As part of the Advertising Week festivities in New York, Facebook chief operating officer Sheryl Sandberg is slated to make a marketing-related announcement on Tuesday morning.

The announcement of a partnership with Nielsen on a product called "BrandLift," which polls Facebook users on ads they see on the social network, was first reported by The Wall Street Journal.

There weren't a whole lot of details disclosed, even when the two companies confirmed the news of "a multi-year, strategic alliance" later on Monday. Nielsen BrandLift, a release explained, is the first product created from the deal. It will use opt-in polls on Facebook's home page to gauge user sentiment around advertisements, measuring "aided awareness, ad recall, message association, brand favorability, and purchase consideration." It'll roll out in the U.S. to a number of test partners this week and to all advertisers over the next few months. There will be "hundreds" of BrandLift tests in that time, the release explained.

An end date to the multi-year deal has not been disclosed, Nielsen Online CEO John Burbank told CNET News on Monday evening.

For now, Nielsen BrandLift is part of its partnership with Facebook. But the product "will expand to other websites" eventually, Burbank said. He wouldn't comment on repeated rumors that Facebook would be launching an ad network for sites participating in its Facebook Connect program.

The Palo Alto, Calif.-based Facebook has a history of big New York marketing pushes to further establish itself as a major player on Madison Avenue. Earlier this year, Sandberg keynoted the AdAge Digital conference to pitch Facebook's "active network" of friend connections as a powerful advertising tool, and two years ago Facebook founder and CEO Mark Zuckerberg unveiled the social network's first major advertising initiative shortly after Microsoft had taken a $240 million stake in the company.

(Part of that 2007 announcement included Beacon, the ill-fated advertising program that Facebook finally put the kibosh on this week.)

Getting statistics on advertising effectiveness is important for Facebook, especially with a longtime industry player like Nielsen on board. While Facebook has been growing in prominence as a digital ad destination, it's still had to do some convincing to combat the industry attitude that social-media advertising doesn't work.

Also sure to be mentioned at Tuesday's announcement? The fact that Facebook has recently hit 300 million active users around the world and continues to grow fast. That's a lot of eyeballs.

Nielsen's own measurements of Facebook traffic place the social network as the fourth largest unique audience in the U.S. (and remember, most of its traffic is now overseas), and that out of all Web-based brands it enjoys the most individual time spent per user.

This post was expanded at 7:33 p.m. PT.

NEW YORK--"We're here today to talk about how many friends you can have," Facebook Chief Operating Officer Sheryl Sandberg said in her keynote address at the AdAge Digital conference on Wednesday, the same day that Facebook announced that it had reached the milestone of 200 million active users around the world. "This is certainly something I thought about a bit before I joined Facebook, but in the last year, this has been a major question in my life."

But the major question she was addressing in her talk was a different one: namely, can advertisers reap dollars from a social network? It's the usual meat of any social network executive's talk at a Madison Avenue conference.

Her answer, obviously, was "yes."

Facebook COO Sheryl Sandberg

(Credit: Facebook)

Facebook's new buzzphrase, at least when it comes to advertising pitches, is "active network," which refers to the group of people whom you keep tabs on in a social-networking context enough to know what's more or less going on with their lives. "The average Facebook user has 120 friends," but even with a number like 120, you're not actively in touch with 120."

But active networks can overlap, she said. Friends can comment on their friends' photos in which other friends are "tagged," for example, making an indirect connection. Or Facebook users can see virtual gifts that people whom they don't necessarily know have posted to mutual friends' profiles.

"This is a dramatic shift in how people are communicating," Sandberg said. "This really just changes things. 'Virality' is more and more common, and things can just spread more quickly."

She brought up a few examples in which the "active network" can add up to something big: a "flash mob" organized in a London subway station, where 4,000 people RSVP'd to an invitation on Facebook after seeing it spread through their friends' profiles; and the "25 Things" fad, in which the number of people tagged in "notes" on Facebook skyrocketed from just more than 1 million to more than 9 million.

Sandberg also cracked a joke about the viral spread of negative responses to a Silicon Valley Web company's interface redesign. It was a self-effacing jab at Facebook's latest revamp, which proved controversial.

Prior to joining Facebook last year as its COO, Sandberg had been at the upper echelon of Google's sales operations. So this was the sort of audience she's used to addressing.

And she quickly segued to what Facebook wants the advertisers to hear. The social network's "Engagement Ads" product can take advantage of "the same engaging properties as other parts of our site," Sandberg explained. Around Valentine's Day, for example, automaker Honda started a campaign in which the company "ordered" 750,000 virtual gifts--images of heart-shaped car fuel gauges--that members could give to their friends for free.

"Within four days, all 750,000 gifts...were gone, which meant that 1.5 million people directly interacted and engaged with Honda on this promotion," she explained. Well, sort of: it doesn't take into account the fact that some members could have sent multiple gifts. But all in all, there were more than 130 million page views on Facebook that brought up one of the Honda heart gifts.

Facebook first announced Engagement Ads last August.

Someone in the audience asked what she had to say about the widely held industry opinion that advertising on a social network just doesn't bring in a good return on investment. Sandberg's response was that while it might have been true in Facebook's early days, it doesn't hold true for the social Web anymore.

"Social media has had to do some evolution, some work to come up with the right ad products, and we find that we are really first on that path now," she said. "Banner ads that interrupt your experience, or text ads, we don't think work as well in this environment. It's actually just in the last year that we were able to launch ads on our site that behave the way the rest of our site behaves."

Facebook has hired the former chief of staff to onetime U.S. Attorney Alberto Gonzales as its general counsel, according to the Los Angeles Times. Ted Ullyot, currently a Washington, D.C.-based partner for the law firm Kirkland & Ellis, will relocate to the Bay Area and join the Palo Alto social network next month.

He appears to have been hand-picked by Elliot Schrage, the former Google executive who joined Facebook as vice president of communications and public policy this spring, and Sheryl Sandberg, another Google alum who now serves as the company's chief operating officer.

Ullyot "has an extraordinary combination of private legal practice and public sector experience," Schrage told the Los Angeles Times. "So many of the legal issues we face touch on both of those arenas. He is equally comfortable helping us expand internationally as he is in helping us navigate complicated legal issues we may face in Washington. Ted's arrival really demonstrates we're a little more grown-up."

"Grown up" is a necessity for Facebook's image these days; founder Mark Zuckerberg is only 24, and after the public relations clusterbomb that was the "Beacon" advertising program, it was clear that some more seasoned executives had to be brought on board.

Ted Ullyot

(Credit: Kirkland & Ellis)

Ullyot joins Facebook fewer than six months into his stint at Kirkland & Ellis, though he had been at the law firm from 1996 to 2002 before serving as general counsel for AOL Time Warner Europe out of the company's London office and then general counsel for the Greenwich, Conn.-based ESL Investments, the billion-dollar hedge fund founded by Edward Lampert.

Between 2003 and 2005, Ullyot occupied a number of positions in the federal government, including chief of staff of the Department of Justice and associate counsel to President George W. Bush. Most famously, he handled the federal government's response to the headline-grabbing Valerie Plame CIA leak.

"Ted has extremely strong connections with the Republican party, and we think that's a good thing," Schrage told the Times. COO Sandberg, on the other hand, has political experience from the other side of the aisle: she served as chief of staff to former President Bill Clinton's Department of the Treasury.

Like many of Facebook's top executives, Ullyot attended Harvard University, where the social network was birthed in Zuckerberg's dorm room in 2004. Ullyot obtained his undergraduate degree from the elite college in 1989, two years ahead of Sandberg; an old Harvard Crimson article hints that he competed on the cross-country team. In addition to Sandberg and Zuckerberg (who dropped out to work on Facebook full-time), Schrage is also a Harvard graduate--he obtained his law degree there.

Some of Facebook's most famous legal problems have their roots at Harvard, too. The founders of ConnectU, the would-be social network that only recently settled a years-old intellectual property suit against Zuckerberg, were members of the class of 2004.

q&a On Tuesday, Facebook announced that it had hired six-year Google veteran Sheryl Sandberg as its chief operating officer, a big move as the hot social network attempts to convince the Valley that it's here to stay and slated to keep growing fast.

Facebook founder Mark Zuckerberg had a few minutes to chat on the phone about Sandberg's new role at the company.

The 23-year-old CEO insisted that Sandberg isn't a pure replacement for outgoing executive Owen Van Natta. From what it sounds like, her role will be significantly more extensive. Not surprisingly, she's going to be in charge of keeping things running smoothly--and probably keeping Facebook's young executives in line, too.

Do you think this is going to help advertiser confidence?
Mark Zuckerberg: The reason why we did this is primarily to scale all of our different business operations. Advertising is definitely one piece of that, and Sheryl has a lot of experience there. But the primary reason why we did this is just because Facebook is scaling very quickly, and if we want to reach our goal, which is to help everyone in the world communicate more efficiently, we need to build an organization that's going to grow and scale globally. And someone like Sheryl, who has experience doing this, is going to be a tremendous asset to us in doing that.

Sheryl Sandberg is the latest in a handful of high-profile Google employees hired at Facebook (i.e. Benjamin Ling, Gideon Yu). Are we seeing a "Google-ization" of Facebook here?
Zuckerberg: I think there are a lot of really interesting companies out there, and different experiences that people have before they joined here. (Sandberg) is really the only senior executive at the company who's come from Google so far. Gideon (Yu) was at Google for a very short period of time after YouTube was sold to Google, but that's not his primary experience.

What will be the first area where we see Sandberg's influence and expertise at Facebook?
Zuckerberg: I think it's going to be subtle in a lot of ways because the nature of operations is that you're scaling an organization and powering other people. It's not that Sheryl is going to be doing all these things herself, but Facebook already has 500 employees and it's scaling very quickly, and I think it's just going to go a lot more smoothly with someone who's talented like her here.

How will her role be different from Owen Van Natta's role as chief operating officer and then chief revenue officer?
Zuckerberg: Well, they were different roles. Owen, as chief revenue officer, was mostly focused on direct sales, which is what we have now, and business development. He was just focused in different areas. I wouldn't view this as really a replacement there, as other people have characterized it. Owen was doing that role, and he wanted to be a CEO, and I think Owen did great work here and I'm supporting him in doing that. With bringing in a COO, we just decided it was the right time for him to go and do that. Sheryl's role is going to be managing sales and business development but also a handful of other things.

So there's going to be all the different sales channels, direct and inside and online sales, and human resources, and marketing, communications and public policy...Sheryl will be in charge of all these different operations, and our consumer operations, the user operations group. It's a large organization for someone to oversee, and she's going to be primarily responsible for scaling that organization and scaling those operations.

What do you expect Facebook's employee head count to be at the end of 2008?
Zuckerberg: We have our projections that say we will probably get very near, maybe over a thousand, but it really just depends. We're hiring very aggressively just in terms of finding as many talented people as we can, and right now we're having a lot of success in doing that. So I think there's a good chance that we'll continue to grow very quickly this year, but I think over the long term in order to meet our goal just in terms of building this communication system that helps everyone in the world communicate more efficiently, that's going to require building a substantial business, and probably a lot of people all over the world, and we're going to need an organization, a set of operations that can do that. Sheryl's going to be really critical to helping us do that.

Facebook announced on Tuesday that it has hired a new chief operating officer to replace the outgoing Owen Van Natta. Starting on March 24, veteran Google employee Sheryl Sandberg will take on the executive role at the social network.

For six years, Sandberg was vice president of global sales and operations at Google, where she helped to grow the company's AdWords and AdSense products, as well as its Google.org nonprofit division.

As part of her new job, according to a statement from the social-networking company, she will "be responsible for helping Facebook scale its operations and expand its presence globally," as well as "manage sales, marketing, business development, human resources, public policy, privacy, and communications."

Sheryl Sandberg, the Google veteran who will be Facebook's new COO.

(Credit: Dan Farber/CNET Networks)

Sandberg is also an alumna of both Harvard University's undergraduate college and Harvard Business School; Facebook famously got its start in dorm rooms at the elite Cambridge, Mass., institution.

Hiring an experienced Silicon Valley executive is no surprise on Facebook's part. Founder Mark Zuckerberg has yet to reach his 24th birthday, and the fast-growing company has run into some rocky patches over projects like the "Beacon" advertising campaign and members' ability to delete their profiles.

Some critics have suggested that in order for the company to stay on top of Silicon Valley, it would need more seasoned employees in high places.

Additionally, Sandberg's experience in building the Internet's most successful digital-advertising giant will be a valuable asset to Facebook, which is in the process of building a "social advertising" model that can boost the company's profits.

Social-media advertising's less-than-stellar reputation was solidified when Google co-founder Sergey Brin said the search giant's contract with News Corp.'s MySpace.com, Facebook's chief rival, had produced disappointing revenue results.

By pulling in a Google advertising veteran, Facebook likely hopes to bring new levels of legitimacy to its advertising strategy, boosting advertiser confidence and eventually profit margins.

"Sheryl is a great manager who will help scale Facebook's operations globally," Zuckerberg, to whom Sandberg will report, said in a statement. "She has relevant experience and a track record of scaling business operations and building new kinds of advertising networks. Sheryl understands Facebook's goal of connecting everyone in the world and is passionate about building a business that will enable us to realize this mission."

Sandberg, 38, is by no means the first Google staffer to defect to a high-profile post at Facebook. The company's chief financial officer is Gideon Yu, formerly of YouTube, and former Google Checkout czar Benjamin Ling is in charge of product marketing for the Facebook Platform developer initiative.

Sandberg and Zuckerberg, according to an article in The New York Times, met at a Christmas party last December. Negotiations between the two reportedly began with the help of venture capitalist Roger McNamee of Elevation Partners.

Sandberg had joined Google prior to the company's initial public offering, and before that was chief of staff for former Harvard President Lawrence H. Summers when he was secretary of the treasury in former U.S. President Bill Clinton's administration.