On Summers, Sandberg and Hughes

Barack Obama recently announced his economic team. The markets reacted well to the news that Tim Geithner would be the new Treasury Secretary but from the point of view of the technology world the more interesting appointment was Larry Summers as White House economic advisor.

The reason is that Summers’ chief of staff when he was Treasury Secretary in the Clinton administration was current Facebook COO Sheryl Sandberg. I’m willing to bet that ever since the election she has been dying to get back into the Washington game and this is the opportunity to do so. Summers will have known about this appointment for a while and will have been thinking about his staff. People usually like to assemble teams from others they have worked with before so the feeling is likely to be mutual. The question is whether Sandberg will jump.

As tech entrepreneurs we see Silicon Valley as the epicenter of the world. However to most people the real centre of the world is Washington DC. At this point in time with Obama about to take office and the Democrats in the ascendance on Capitol Hill that is doubly, trebly so, especially for a Democrat like Sandberg. No matter its central importance in Silicon Valley, Facebook will start to feel like a backwater to someone of Sandberg’s background.

The return of Chris Hughes

If Sandberg does leave it begs the question of who should become Facebook COO. It should be Chris Hughes. The Facebook co-founder left early to work on then Senator Obama’s nascent campaign. He revolutionised political campaigning by building a set of volunteering tools which contributed to the Obama campaign being the best organised in history.

Now with Obama elected that purpose is gone. Four years is a long time in Politics and a lifetime in technology, someone like Hughes will never be content to twiddle his thumbs for four years and I doubt the 2010 midterms will be able to match the energy and excitement of 2008. A beginning for Sandberg will be an ending for Hughes – timing and opportunity in perfect alignment.

There are two reasons Zuckerberg should bring back Hughes. First is that with the departure of Dustin Moskovitz there are none of the original founders left apart from Zuckerberg. Second the Chris Hughes that left Facebook in 2006 will not be the Chris Hughes who goes back in 2008. He spent 2 years at the epicenter of one of the best organisations, political or otherwise, and has been on an unbelievable learning curve. David Plouffe is one of the best managers in the world, judging by his achievements, and Hughes has spent the last 2 years alongside him. So if a slot does come up for Facebook COO there should be only one name on the shortlist.

Related articles by Zemanta

• Sheryl Sandberg, Facebook stuck with each other [Politics]
• Washington could call for Facebook’s Sheryl Sandberg [Politics]
• Facebook Co-Founder Moskovitz Leaves for New Venture

On business models

There are rumblings coming out of facebook that all is not well. Experienced hands are leaving at a steady rate as the company struggles to find a business model. In March they turned to the person who ran Google’s money machine AdWords to come up with one. Her latest thoughts are:

She said that after six years in advertising at Google, she believes that there’s an “unusual and extraordinary opportunity” for advertising at Facebook. That opportunity is somewhere between major brand advertising like Super Bowl commercials and the direct-response search ads that Google sells.

Sorry, no.  The basic problem is that nobody looks at the ads served on facebook because they are barely relevant. This has resulted in low conversion and smaller CPM rates. What facebook needs is a creative solution and they don’t have the right person to deliver it. Sandberg ran AdWords well but she didn’t devise the business model for search engines. In fact nobody at Google did, it was Bill Gross who came up with paid search. Google was initially sniffy but adapted paid search into AdWords which Sandberg subsequently ran.

The problem facebook has is that they need the creator, not the administrator. When they have the idea then Sandberg will be the person to grow it from a seed into an empire. But they haven’t had the idea. This was the thinking behind opening up the platform. If they couldn’t devise the business model then let someone else do it. Unfortunately so far all this has yielded so far is an army of applications none of which have got any closer to cracking the essential problem. Don’t get me wrong, I love Bowling Buddies but there is no cash in it.

Read more:
On useful advertising
On the future of social networks

Pic: Laughing Squid

On Sheryl Sandberg

I was reading a post from Fake Steve outlining how new facebook COO Sheryl Sandberg is getting rid of the early employees. It begs the question of where Mark Zuckerberg fits in, FSJ speculates:

Smart money says he gets pushed into some kind of “visionary” role so that the new team of Valley veterans, installed by Facebook’s investors, can finally complete their takeover of the company.

After I read this I looked up Sandberg, what struck me was that she was overqualified to be a COO. In fact at 38 the only post someone who was Chief of Staff to the Secretary of the Treasury before they hit 30 would be interested in is CEO. It doesn’t make any sense that someone of that calibre would leave Google for anything else.