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FORTUNE.COM // APR.1.19
about what she expects to hear from visitors or
the greatest example ever of corporate wishful
thinking. She and Zuckerberg vigorously push
back on the notion that Facebook “sells” user
data to marketers. What Facebook allows is the
hypertargeting of anonymized users on behalf
of marketers so that Facebook and its pay-
ing customers can profit from that data. “The
actual inherent business model is really strong
and much better than any other,” she says
by way of explaining why Facebook won’t—
indeed, cannot—give it up. What’s more, Face-
book sees its business model as a win-win. “It’s
much better than selling subscriptions, which
only rich people can afford. You cannot have
2.7 billion people on a service if you charge. For
a lot of the people who use our services, even a
dollar would be out of range.”
Whether or not the masses can pay to use
online services, Facebook undeniably faces a
rich world/poor world conundrum. Its growth
is in the latter, but its profitability lies in the
former. Last year the number of overall users
grew 9%, much of the growth coming from
outside its mature markets. Facebook said it
makes an average of nearly $35 quarterly on
each user in the U.S. and Canada, more than 10head of civic engagement, has shifted his
focus from voter registration to preventing
election interference. Facebook has reassigned
engineers in its once separate “safety and
security” group to be embedded in individual
product teams.
Such fixes are real, yet they are designed
to improve Facebook, not to fundamentally
change it. Removing terrorist propaganda
is a crowd pleaser, argues Gene Munster, a
veteran analyst with Loup Ventures, especially
compared with the thornier issue of what
Facebook does with its users’ data. “They like
talking about that because it’s fixable,” he says.
In fact, Facebook argues that beyond the
bad actors it unintentionally allowed onto
its network, it doesn’t even have a problem
to fix. Instead, it maintains that if only its
advertising model were better understood,
particularly by the public, its problems would
be diminished. “It is core to our business,” says
Sandberg, of Facebook’s holy trinity of user
data, advertiser payments, and free content.
“And it is the hardest to explain.”
Sandberg works in the same building as
Zuckerberg, and her conference room has a
name: “Only Good News.” It is either a wry joke
“It is core
to our
business,”
says
Sandberg, of
Facebook’s
business
of ad
sales, user
targeting,
and free
services.WE HEAR YOU:
Sheryl Sandberg
during a U.S.
Senate Select
Committee on
Intelligence hear-
ing on foreign
influences in
social media in
September 2018.