The Entire Facebook Goodbye-Gideon-We-Are-the-Money-Champions Memo
by Kara Swisher
Posted on April 2, 2009 at 9:02 AM PT
Dear Elliot Schrage:
BoomTown wins.
As Sheryl knows from experience, don’t mess with the Swish. Or Texas. Or Zohan.
Just don’t mess.
For everyone else, here is the entire memo that Facebook sent out this week from CEO and founder Mark Zuckerberg to its 800-person staff about the departure of CFO Gideon Yu and the financial status of the Silicon Valley social-networking start-up, which some had been questioning.
According to the memo, there is a company Q&A tomorrow about it all too! What should I wear?
UPDATE:In a version of the memo I first posted, there was a repeated paragraph, with slight differences. This might have been a software error–several versions I got of this entire memo had different punctuation in various places.
In any case, I eliminated the extra repeated graph and I changed one part below of “we are” to “Facebook is” in brackets.
COMPANY CONFIDENTIAL–DO NOT FORWARD
Hey Everyone–
Today ends the first quarter of 2009, so I wanted to send out an update on our growth and financial progress, as well as a couple of changes we are making.
Our user growth has been extraordinary over the past year and has continued to be strong throughout Q1. We are getting very close to reaching our 200 millionth active user. This is pretty remarkable considering we just reached 100 million actives a little more than seven months ago. We have become the top site for sharing information on the web, and this gives us a good strategic position to help people share even more.
I am also pleased that our financial progress has been very strong as well. While we came into this year wondering how the recession might affect us, our financial performance in the first quarter surpassed our expectations. As other businesses around us are slowing down and cutting back, we continue to grow around the world. Our advertising products are becoming more attractive for advertisers and we have seen strong growth in both our domestic and international direct sales and online sales channels.
Even in the current economic environment, we are confident that this success will continue. Based on our first quarter results, we now believe we are on track to see our revenue grow by at least 70% this year. We just completed our fifth straight quarter of EBITDA profitability. And most importantly, we expect to achieve free cash flow profitability next year. That’s an important measure of financial success and sustainability because it means we’d be able to fund all of our operations and server purchases from the cash we generate while increasing our cash reserves in the bank. Hitting these numbers will require continued hard work, discipline and execution by everyone here at Facebook, but we are on the path to achieve these goals.
As we ramp up to take on these challenges, I want to let you know that Gideon Yu will be leaving the company. Gideon has played an important role in helping us achieve our financial success, building a strong finance team and establishing the core financial operations of our company. I will always be grateful to Gideon for his contributions to Facebook and what we are trying to accomplish. As those of you who know him know, Gideon’s family is his highest priority and it’s certainly not the usual cliché to say that he plans to take some time off to be with his wife and son. Gideon and I have often discussed that the next stage of his career will likely be as an investor, and I fully support him in this regard.
We have retained Spencer Stuart to search for a new CFO and we will be looking for someone with public company experience who can help take us to the next stage in our growth.
In the interim, the finance team will report to Cipora Herman in her capacity as Treasurer and Ted Ullyot as mteam lead. In addition, [Facebook is] fortunate that Peter Currie, the former CFO for Netscape, has agreed to serve as the advisor to Facebook until a new CFO comes on board.
As always, please feel free to reach out to me or to others on mteam if you have any questions about our finance plans or organization. I’ll discuss this more at the Q&A on Friday and I will be happy to take questions then too.
Congratulations to everyone on a great start to the year and on all the momentum you have all helped build for the rest of 2009.
Mark
Comments
Kara,
Your Facebook coverage is always spot-on, even the rumor mill stuff.
As a lover of All Things D it pains me to read this coverage, however, knowing you are writing with a conflict of interest.
Your blog’s disclaimer regarding Google is awesome. Perhaps you could do something similar with Facebook, considering your boss owns MySpace?
Just a thought. . .
Posted by Reid Wegley at April 2nd, 2009 at 10:14 amR:
I always link to my disclosure with Google and when mentioning MySpace prominently, I always do.
This memo has nothing to do with MySpace though and I treat that company as any others.
In fact, most of my coverage of them is not what you might call positive (see recent piece on new digital heads and issues around CEO Chris DeWolfe).
I always focus on accuracy and do not care whom I upset.
But point taken.
Posted by Kara Swisher at April 2nd, 2009 at 11:03 amKara,
Appreciate the response. Perhaps I’m too old-school? The blurring of the lines in today’s media culture is absurd, in my opinion.
That being said, I may be the only one who cares enough to speak up — hence the lack of commentary here.
RW
Posted by Reid Wegley at April 2nd, 2009 at 11:28 amIs it possible that there were several versions of the memo as a means to ferret out who your sources are? I know other companies have done that, sending each person a slightly different version and matching with the one that shows up in the publication.
As to bias, to the poster above, I have a feeling that a failure of Facebook would not result in a sudden surge for MySpace (or Orkut or any of the others). At issue is the whole concept of these closed befriending systems. Anyone concerned about privacy considerations on one is not likely to use one of the others either.
Facebook is getting the most coverage simply because it is the most popular. Of course the soap-opera of Facebook the management team may contribute to a lot of the free publicity it gets and may have played a part in its popularity.
Posted by Mac Beach at April 2nd, 2009 at 12:26 pmwhat markie mark said and what it really means:
“Hey everyone, we’ve hit the wall and our revenue ain’t growing. How the heck do you make money off social networking? This guy named Yu did a good job convincing Microsoft to invest at Google-like valuations but now that the ice has melted well…where’s Al Gore when you need him?
Oh, the agony of the meltdown…
We’re looking for a guy who knows how to make money to support our massive valuation and my even larger ego.
I’ve hired Spencer Stuart and Laurel & Hardy to help figure this out, and what does CFO mean anyway?
Posted by Sam Harrison at April 2nd, 2009 at 3:47 pm