One company has captivated the world’s attention in 2012, for better or ill. With all the attention on its stock, many lose sight of the central role Facebook plays in social and economic life worldwide. Its progress is often critiqued by Americans, but what matters more for the company is how it does in countries like Brazil, South Africa, and Indonesia, where its dominance is even greater. Read excerpts of the discussion below, or download the full transcript.
Kirkpatrick: This is an unusual, and I believe unprecedented session, to have one of the top product people and the top ad person together to talk about where Facebook is heading.
You are now emphasizing that there is a revenue aspect to the product process.
Fischer: We think about these things not just—we think about the user experience and the monetization opportunities as either side of the same coin, in the sense that we really think that in the world that we're moving into, and as Facebook with so much time and attention that we get, that we have opportunities to really bring out new forms of marketing that are really effective. We're seeing great results to that.
Lessin: You pick up a newspaper in the morning. What if it was perfectly customized just for you, what would you see? And the answer is, the content coming from your friends, the people you have kind of asserted are important in your life, is a huge percentage of it. But it's not the whole story. There are plenty of brands and companies that I want to interact with that are part of who I want to hear from and the conversations I want to be having. So when I look at where we are and where we're going and we see these opportunities, a lot of it is about saying how do we take that whole piece of the equation of what it means to have the ideal newspaper, these great experiences about experiencing the world, and then introduce kind of the economic component of it to help optimize that.
Kirkpatrick: Do you think what you just said is another way of saying that over time, the Facebook News Feed and the results you would get from a search engine might in some sense converge?
Lessin: I think a lot has to do with where you start from and kind of the perspective you bring into these types of problems and these problem sets. I think when you think about it, the fundamental piece of Facebook, the place we start from, is that it's all about people. It's all about connecting, expressing things to people, understanding things through people, and using your networks, the people you trust, the connections you've made, to help filter information, to help you live a better life, to experience the world in the best possible way.
Kirkpatrick: David, as the guy who's got to figure out where the money comes from, where is it going to be coming from in two, five, ten years, and how much is there going to be?
Fischer: Well, it's no secret that mobile is the critical growth area. We've certainly invested in a heavy way this year in mobile. One of the key things we started with as a belief, and it hasn't taken very long to come to pass, is that mobile is a great thing for our users, for our advertisers, and for Facebook.
If you just look at the engagement rates of people, that's the number one metric from our standpoint is certainly the number of people, and passing a billion is a great milestone. There's a lot more people to get to—the notion of then, are those people engaged? And what we're seeing is that people on their mobile devices are more engaged.
Lessin: There are people in the world looking at their News Feeds, taking out their newspapers, you want to know what are the most important, exciting things to know. For millions of people or a certain number of people actually knowing there's a great new product for them to buy is a huge deal. That actually is really fundamentally important.
Kirkpatrick: Given that almost everything that you're selling depends on the performance of the News Feed in some fashion, especially on mobile, isn't it going to be necessary over time to introduce more transparency into the functionality? I mean—or do you consider yourselves to be already doing that?
Fischer: I think actually you've put your finger on a really important challenge for us, which is making sure that people understand the value they are deriving. I would argue that it's an equal analogy as if you had bought an ad in a newspaper or magazine to promote Techonomy, that you wouldn't—
Kirkpatrick: That's why people don't do that very much anymore.
Fischer: But there's lots of things that people buy that they don't necessarily question that. Our belief is you should have all that information available to you.
Lessin: What does it mean that everyone can speak to everyone else instantly on Earth for free, right? It means that if you actually, if we had that superpower built into our brains right now and our ears, you couldn't hear anything, because you would be bombarded with 7 billion people speaking to you all at once. So I think the future requires filtering, someone to help you effectively navigate all the information at your disposal to say, really, I have five minutes. I have 30 seconds. What do I need to know right now? What is the best information for me?
We certainly want to give people a sense of who they're speaking to. Audience—both from this perspective but also from a privacy perspective—understanding who you're speaking to informs how you speak.