On Tuesday night, BusinessWeek editor in chief Stephen J. Adler sat down with Facebook Chief Operating Officer Sheryl Sandberg for an exclusive interview. Adler talked with Sandberg about the company’s financial prospects, recent controversies over its redesign and terms-of-service changes, Sandberg’s high school years, and other issues. Edited excerpts follow:
On the questions about Facebook’s business strategy:
It’s a really simple answer, which is that our business is advertising. We’re not waiting to find our business. We found it, and it’s actually working very well. Marketers all over the world have to sell products and services, and they have to generate demand for those services. They do that typically where people are spending their time. But there is a real imbalance right now: Between something like 28% to 29% of people’s time is spent online, but only 8% to 10% of the dollars are spent online. So there is this migration of ad dollars from other places going online.
Then the question is how do advertisers make that useful? What we do is we enable connections. We enable people to connect with users and provide advertising in such a way that it’s not obtrusive at all, but it’s part of the advertising experience and part of the user experience. And so we’re doing really well financially.
We’ve actually just confirmed that we expect to grow revenue 70% year-over-year in this year, obviously a very tough economic environment. We’ve been profitable on an [earnings before interest, taxes, depreciation, and amortization] basis for five consecutive quarters, and that’s ongoing. We’re on a very clear path to cash-flow profitability. So we have a business model, and our ad business is working, and working quite well.