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If Mark Zuckerberg had stayed in school, he'd be a recent grad, maybe settling into a new job or place to live, or continuing to search for that first big break. But as daunting and uncertain as those first few months may have been, they'd be a breeze compared to what Zuckerberg faces now.
The 22-year-old is founder and chief executive of Facebook.com, the social-networking site of choice for college students and the seventh most trafficked. Despite scant experience, Zuckerberg runs a 150-person company that has raised $38 million in venture capital. He turned down at least one acquisition offer for $750 million, and recently signed an advertising deal with Microsoft (MSFT
) that those close to the company say is worth hundreds of millions of dollars over several years.
Add to that a revolt by close to one million Facebook members over a controversial new feature added to the site last week, and the inclusion of yet another feature that may prove just as unsettling to a slew of Facebook users. The dust was barely settling on last week's brouhaha about the site's "news feed" feature, which collects any changes to your profile and broadcasts it to your friends every time they log on (see BusinessWeek.com, 2/08/06, "Facebook Learns from Its Fumble"). Despite the fact that it was information your pals could already track down, it didn't sit well with privacy-minded users. Zuckerberg largely quelled those concerns with a contrite open letter and tighter controls over what is shared with others.
NOT AS EXCLUSIVE. Zuckerberg & Co. may have more explaining to do, now that word is out and a second big change to the site is on the way. Currently, to join Facebook, you have to be associated with a certain high school, college, or recognized company such as Microsoft or Apple (AAPL
But once the new features take effect, anyone who lives in one of 500 geographic regions can sign up. Before you needed to be part of a group; now, you just have to be associated with a place. People who joined Facebook because it was primarily a school-focused network may feel that it's losing a key distinction.
As with the "news feed" announcement, reception to this overhaul will come down to how well Facebook communicates. For the average student at New York University, for instance, little changes. The only people who can browse his profile before were other NYU students and that will stay the same. The change simply allows for 500 new groups to form that all operate independently on the Facebook platform. No one can browse all 9 million registered users.
KEEPING TO HIS VISION. The need for such delicate explanation is why the company pushed back the announcement. The company had planned to announce this second dramatic change of direction on Sept. 12, but after the user uprising decided to put it off. Facebook wanted to prove it had learned from the gaffe and the biggest lesson was not to spring big new changes without warning. But when Advertising Age went ahead with the news, the team started to scramble again. The Sept. 12 announcement date was back on, although the team still won't launch it for a few more weeks at least.
Despite the newfound caution, Zuckerberg isn't backing off his ambitious vision: To build a site that helps people, in his words, "understand the world around them"—be they in college, high school or the working world. He never considered scrapping the news feed or not opening up the site to nearly anyone in the U.S. His view is that Facebook is a utility, not a mere media property. And it's one people are using even after they graduate. For that to continue, they need to be able to form groups that mirror postgraduate life.
The challenge is finding a way to include more users without alienating existing users. It's no mean feat in the fickle social-networking set. There has been resistance every time Facebook has expanded who could use it. When it went from just Ivy League schools to big state schools, students groaned. When it started including high schools, chat rooms lit up with concerns that younger siblings would cramp the college students' style.
QUESTIONABLE STRATEGY? Now that anyone living most anywhere in the U.S. can open an account, it's a further step from the clubby feel that originally ingratiated the site to colleges. Execution aside, the strategy has some industry watchers scratching their heads. Sites dream of having such a lock on the free-spending, hard-to-reach college audience and by trying to do more, Facebook risks alienating them and opening the door to a competitor. "I don't understand why they don't want to be a college network," says David Card, senior analyst at JupiterResearch. "They'd get higher (advertising rates) than MySpace (NWS
), I guarantee you."
Facebook loyals will point to one big reason: Zuckerberg's gut. Even as it grows to a company valued well north of $500 million, he's still the driving force of the company. Even critics were impressed by his mea culpa to users and swift reaction to the news-feed controversy, which Chief Operating Officer Owen Van Natta—one of the token grown-ups on staff—says was all Zuckerberg. "Mark's vision has gotten us where we are today, and is going to take us where we go next," Van Natta says.
And for Zuckerberg's college classmates (not to mention just about all about current Facebook users, at some stage), that means out of school and into a grown-up world. Zuckerberg wants to make sure the site he founded can follow them—and remain relevant—once they get there.