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Summary:

Facebook has been hit with public outcry over some of the changes it’s made to the social networking site over the years, but the real risk, according to comments made by Chief Operating Officer Sheryl Sandberg at a Churchill Club event in Palo Alto, Calif., on […]

3188895480_f4eb18a9beFacebook has been hit with public outcry over some of the changes it’s made to the social networking site over the years, but the real risk, according to comments made by Chief Operating Officer Sheryl Sandberg at a Churchill Club event in Palo Alto, Calif., on Thursday night, is that it doesn’t do enough when it comes to innovation. She was responding to a question from Charlene Li, founder of the consulting firm Altimeter Group, as to whether Facebook goes too far when it introduces major changes to the site. “If Mark were here, I know that he’d say, ‘The risk is that we don’t do enough,’” said Sandberg. She acknowledged that users protested, for example, the New Feed and the home page redesign, but said that in both cases, user engagement — and number of users overall — rose. “We’ll know when we’re not doing the right thing when users don’t continue to grow and when engagement doesn’t grow.”

On Twitter vs. Facebook

Facebook takes a markedly different approach to innovation from Twitter, where much of it is determined by its users; they spurred the creation of the “@” reply function on the micromessaging service, for example. And while Twitter isn’t a major threat to Facebook’s share of the social network market just yet, Sandberg acknowledged its importance. “Twitter is part of the same movement,” she said, referring to the sharing of real-time information, adding that: “They have a very different approach to it, which is fundamentally based on anonymity and broadcasting. Ours is fundamentally based on identity and sharing.”

On Advertising

Facebook revolutionized online advertising, according to Sandberg, because it paved the way for ads that encourage two-way social interaction between consumers and advertisers. For example, many of the ads on Facebook encourage you to take a poll, play a game or answer a question. “I think when the Internet came out, everyone thought it was going to change marketing…and really what happened is a lot of the things that were going on before moved online. So you used to do a TV ad, you did a banner ad — but it was still that one-way communication of one to many,” she said . “Our ads are really two-way and really social, that’s I think the real difference.” And while its ad format offers advertisers something unique, it also helps that Sandberg is sitting on a pot of gold — Facebook’s database of over 350 million users — which allows the social network to connect advertisers with their target audience. This has made the difference for Facebook amid an economic climate where online ad spending has declined two consecutive quarters this year.

A lot has changed at the Palo Alto-based startup since Sandberg joined in 2008 after leaving Google, where she helped develop the search engine giant’s moneymakers, AdWords and AdSense. The company can now boast that it’s cash-flow positive thanks in large part to its self-serve ad business — and that it owns the lion’s share of the U.S. social network market. And if Sandberg’s comments are any indication, the company has no plans to stop innovating anytime soon.

  1. The real risk is FB being hacked. I can’t seem to log in to my own page today, but my user info has brought me to three other peoples pages. How nice.

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    1. Jennifer Martinez Friday, October 16, 2009

      Whoa, did this just happen when you logged on today?

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  2. Indeed. It was occurring between 8-10 AM CST, seems to be working okay now, but we’ll see.

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    1. Jennifer Martinez Friday, October 16, 2009

      Thanks for letting me know. I’ll follow up with Facebook and see what’s up.

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    2. Jennifer Martinez Friday, October 16, 2009

      Hey DB, if you send me an email at jennifer@gigaom.com with some more details, I’ll be able to help figure out what happened. Thanks!

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  3. I can see some real great acquisitions for Facebook once they are public, the user base can be truely a pot of Gold, however you need the right tools. I have some ideas. Google AdWords and AdSense will look like dwarfts against what will hit the market via Facebook. Wondering if Sheryl Sandberg has woken up to such an opportunity and if any VC has realize what is going to happen next. In all my recent meetings I have big doubts they have. Predicting the future as it would always turn out like the past is exactly the wrong path.
    Alexander Straub – Straub Ventures -

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  4. [...] Facebook COO Sandberg: The Risk Is That We Don’t Do Enough (gigaom.com) [...]

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  5. [...] here to read the rest: Facebook COO Sandberg: The Risk Is That We Don't Do Enough AKPC_IDS += "251,";Popularity: unranked [?] « Twitter and Facebook outrage over Jan [...]

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  6. Great information on Facebook. I really like Facebook. I think many of the changes in my opinion have been good. I know that if they continue going in the direction at least I think Facebook will be harder to hack into. Just like with any website including social networking websites if you are concerned about it. You should change your password at least every six months.

    I just read an article about being Internet Savvy. With identity theft on the rise they recommend you do this to protect your personal information as well as a measure to keep your data safe online. Hope that puts some of you at ease.

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  7. [...] if Facebook would reach a similar deal with Google at the Web 2.0 Summit, COO Sheryl Sandberg, a former Google executive, said this afternoon that the company had “nothing to [...]

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