Fourteen years after joining Facebook, Sheryl Sandberg is leaning back and stepping down. Her departure as chief operating officer of Facebook’s parent company Meta and right-hand woman to founder Mark Zuckerberg comes at a low point for the company.
Known for adding cosy anecdotes to investor calls about the small businesses that use Meta’s digital advertising, Sandberg was instrumental in helping the company spin user attention into advertising revenue.
When she joined in 2008, Facebook was a 4-year-old start-up with annual revenue of $272mn, a net loss of $56mn and a few hundred employees. Last year, revenue was close to $118bn and net income $39bn. Headcount has jumped to over 77,800 people. The tally of users who log into products each month has ballooned to 2.9bn.
Yet both Sandberg and Meta struggled to manage the complications that came with scale. Sandberg’s polished presence, reputation for championing women and ability to charm Washington were no match for claims that Facebook enabled election interference and aided the spread of misinformation.
Investors are a hard-nosed bunch. Reputational damage did not hamper market cap while advertising revenue continued to climb by 20 or 30 per cent each year. In 2022, however, it is forecast to rise just 7 per cent. Privacy changes have restricted Meta’s ability to track internet users and monitor the impact of advertising.
Sandberg is still on the board of directors. She is also the fourth-largest individual shareholder after Mark Zuckerberg, Eduardo Saverin and Dustin Moskovitz.
But Meta’s advertising business needs more help. Sandberg’s exit comes in the wake of a corporate rebrand that continues to confuse investors. Zuckerberg’s ambitions for virtual reality are expensive and do not yet offer a convincing profit forecast. In the last quarter, the net loss for Reality Labs, home of the metaverse project, was close to $3bn — equal to a fifth of the company’s cash and cash equivalents. Without advertising growth, Meta’s transformation will not succeed.