Financial Times Europe - 07.10.2019

22 ★ FINANCIAL TIMES Monday7 October 2019

Mark Zuckerberg is one of the world’s
richest men and he runs one of the
world’s most important companies. But
last week the Facebook boss made an
unusually unpleasant discovery.
Someone had secretly made two hours
worth ofaudio recordings t internala
staff meetings he addressed in July and
sent the lot to tech news websiteThe
Verge.
This was striking for two reasons,
starting with the leak itself. Facebook
has about 40,000 employees and Mr
Zuckerberg has held weekly Q&A
sessions with thousands of them for
years. Although news drips out
occasionally, it rarely gushes forth in
the form of a two-hour recording.
Without knowing who did the
leaking or why, it is impossible to know
if the disclosure means staff are
growing more disillusioned with their
leader. But if they were, it would not be
a shock.
Mr Zuckerberg has spent the past
two years struggling to contain a rising
stream of scandals, from fake news and
election meddling to privacy breaches
and the livestreaming of a gunman’s
brutal attack in New Zealand. No
wonder the Pew Research Center says
the share of Americans who think

technology companies have a negative

impact on the US has nearlydoubled ni

the past four years. And no wonder the

line of people calling for a break-up of

his empire, which includes Instagram

and WhatsApp, has spread beyond

politicians to his old university friend

and Facebook co-founder, Chris

Hughes.

As Mr Hugheswrote his year, Mrt

Zuckerberg’s focus on growth had “led

him to sacrifice security and civility for

clicks” and his “staggering” influence

was unchecked because he controlled

more than half Facebook’s voting

shares. That underlines a more

troubling aspect of the leaked audio.

Mr Zuckerberg’s staff address

inadvertently reveals the extraordinary

self-belief that has made him such a

remarkable entrepreneur yet threatens

to be his undoing. At one point, he was

asked how he was able to balance his

financial responsibility to shareholders

with his moral responsibility to society.

He answered with a story about a

defining moment in his life: the

decision he took in 2006 at the age of

22 not to sell his two-year-old social

network to Yahoo for $1bn. Facebook

has a market value of$500bn odayt

but back then his move seemed mad.

As Mr Zuckerberg told his staff, the

group’s 10m users were dwarfed by the

100m at rival network, MySpace,

which was growing faster. “Our board

was super upset,” he said. “Our whole

management team basically quit.” He

was told by “all these experienced

people” he would regret his decision for

the rest of his life. Surviving a moment

like that at the age of 22, he said,

“leaves you with a lot of confidence

that you can make long-term decisions

and that they can work out over time”.

The thing was, he added, if he had

not kept control of his company he

might have been fired for a decision

like that, or others that led to Facebook

suffering one of theworst ne-dayo

stock market wipeouts in US history.

“We wouldn’t even be here if I didn’t

have control,” he said. “Over the long

term, it really is profitable to do the

right thing.” The trouble is, Mr

Zuckerberg’s definition of the right

thing looks increasingly strained.

Under his rule, Facebook has earned a

reputation for a sluggish response to

criticism and sometimes outright

denial. It does not help that he has

repeatedly ignored requests to testify

before British and Canadian MPs

investigating his group’s behaviour.

There was a time when his

unshakeable confidence could impress

the giants of his industry. In hisbook,

Becoming Facebook, Mike Hoefflinger, a

former executive at the company, tells

of a 2009 meeting between Mr

Zuckerberg and Silicon Valley

statesman Andy Grove, the late head of

Intel. One of Mr Grove’s first questions

was: “How did you turn down Yahoo’s

$1bn?”

“I just thought we could do it,” said

Mr Zuckerberg. In that answer, writes

Mr Hoefflinger, “one visionary CEO

with willpower recognised another

across a chasm of nearly two

generations”. That was 2009. In 2019,

Mr Zuckerberg’s willpower remains

undimmed. But so does the fact that it

has clouded his vision to the point that

it may yet lead to his downfall.

[email protected]

Twitter:@pilitaclark

“Under Zuckerberg’s rule,

the company has earned a

reputation for a sluggish

response to criticism and

even outright denial”

Facebook’s

biggest threat

is its chief ’s

fatal self-belief

CROSSWORD

No. 16,291 Set by CRUX



 

 



  

  

   



 

 

JOTTER PAD

ACROSS

1 Second coach is behind the

scenes (9)

6 Apart from starter, cooking

hailed as perfect (5)

9 FA aim to break up such

gangs (5)

10 Extremely faint signal at sea

(4,5)

11 What belongs to you, really, is

... me! (5,5)
12 Sponge conceals head of reef,
a danger to shipping (4)
14 Sign on back of last runner
that fails to start! (7)
15 Decline to take one’s cue?
(2,2,3)
17 Map or scheme car designer’s
involved with (7)
19 Help someone who’s taken in,
we’re told (7)
20 There’s danger in not starting
fast (4)
22 Leave me some books in the
office (10)
25 What some players need on
reaching forty? (6,3)
26 Female singer should make a
comeback (5)
27 Long, long story about Spain
(5)
28 Jaguars eg might be caught in
it (5,4)

DOWN

1 Irregular pay for retaining a

politician (5)

2 Business collapse of Rolls or

Royce, for example (2-7)

3 Thrilled by celebrity, or

attacked by one! (10)

4 Unfavourable jingle? (7)

5 The Listener takes promo for

sleep aid (7)

6 Indulge oddly in such gossip,

maybe (4)

7 Bird-dog, not black (5)

8 To a girl it could be someone

in a suit (9)

13 One who must count as a

rustler? (10)

14 May 24 be an old colonial

celebration? (6,3)

16 English pupils sit in correct

part of aircraft (9)

18 I choose whether spades lead

or not (7)

19 Endless rush made an

impression (7)

21 South Island’s contribution to

marine exploration (5)

23 Secure summit provides

protection for EU (3,2)

24 Spirit starts to ebb long after

nightfall (4)

Rana Foroohar

Luxury real estate is finally

having its global downturn

ZOPINION

Pilita Clark

Business Life

Founder Mark

Zuckerberg has been

accused of sacrificing

security for clicks Getty—

Private jets and profits

Sources: Refinitiv, FAA, UK government , FT calculations































   

US business jet arrivals

and departures (’,

-month average)

S&P 

trailing ebidta

margin ()

Carbon emissions

Grams of carbon dioxide emitted

per passenger per kilometre







Economy

class

Business

class

First

class

Private

jet*

* Assumes long-haul flight and mid-sized private jet  per cent occupied

{ }

Private jets are seductive. Warren

Buffett once called his “The

Indefensible” — a nod to his criticism of

corporate profligacy — but soon

renamed it “The Indispensable”.

The Berkshire Hathaway boss is not

alone. Private plane use has risen in line

with profit margins of US companies.

Donald Trump’s tax cuts have boosted

second-handprices.

But their value is more in question

than ever. It is not just a question of

whether time savings and security

benefits justify the financial costs.

Increasingly, there is another budget to

consider — carbon.

Some flights are hard to justify.

Famously, a RJR Nabisco boss once

flew his dog by corporate jet under the

passenger name “G Shepherd”. A spare

jet followed the aircraft bearing Jeff

Immelt when he was boss of General

Electric in case of mechanical failure.

Analysis of more than 60,000 corporate

flights byUS academics ound about af

10th went to resorts such as Las Vegas.

Yet the same research found jet use

was linked to higher returns for

companies with widely spread business

sites. Cutting flight times, travel time to

the airport, and security and boarding

procedures may outweigh a jet’s

financial costs. The median pay for an

S&P 500 boss is about $5,000 an hour,

assuming a 48-hour week and two

weeks of holiday a year — not much

less than the cost of jet hire. (Alphabet

last year paid $7,500 an hour to use one

belonging to one of its directors.)

Security may be a factor too. Apple’s

board bans Tim Cook from commercial

flights for leisure as well as work.

The carbon emissions of a corporate

jet are a huge black mark. A CEO

travelling 1,000km on a midsized jet like

the Gulfstream G200 is responsible for

500kg of carbon dioxide if several seats

are unfilled, Lex calculates. That carbon

burden is two-thirds more than he or

she would generate flying first class on

an airliner and six times more than for

an economy seat. It is also more than

the annual emissions of citizens of

some 36 countries, according toWorld

Bank figures.

Aviation is likely to account for a

growing share of carbon emissions.

Technical fixes are elusive. Flights can

be made carbon-neutral by planting

trees and the like. But many climate

experts are sceptical about offsets.

Paying for absolution can be seen as

the modern equivalent of medieval

indulgences. As companies ratchet up

their promises to tackle global warming,

pressure to junk the jets will grow.

Corporate jets:

emission critical

OCTOBER 7 2019 Section:Features Time: 10/20196/ - 18:57 User: andy.puttnam Page Name:1BACK, Part,Page,Edition:EUR , 22, 1