Architect of Google's YouTube deal exits Facebook
We need a new CFO... bitch!
Facebook chief financial officer Gideon Yu has left the fast-rising social-networking phenomenon after just 20 months and as it prepares to go public.
Before joining Facebook in August 2007, the Harvard Business School grad was the CFO of YouTube beginning in September 2006, where he helped engineer its acquisition by Google in October 2006 for $1.65bn. Before moving to YouTube, Yu was the senior vice president and treasurer of Yahoo! starting in May 2002, and prior to that held various positions at NightFire Software, Disney, Hilton, and Credit Suisse First Boston/Donaldson, Lufkin & Jenrette.
Facebook gave no reason for Yu's departure, saying simply in a statement that he "will be leaving the company". It added the standard dose of corporate back-patting, by saying: "Gideon has played an important role in helping us achieve our financial success, building a strong finance team and establishing the core financial operations of our company."
Part of that important role, it seems, included a hat-in-hand trip to Dubai in late 2008 for help in refilling Facebook coffers strained by rising expenses. That came after Yu wrangled $240m from Microsoft in October 2007 for a mere 1.6 per cent stake - an investment that indicated a $15bn valuation for a company with a tenuous business model.
The Facebook brain trust remains confident, however. The company said: "Despite the poor economic climate, we are pleased that our financial performance is strong and we are well positioned for the next stage of our growth. We have retained [international head-hunting firm] Spencer Stuart to lead our search for a new CFO and will be looking for someone with public company experience."
The Wall Street Journal's Kara Swisher also reported that an internal memo was circulated among Facebookers, claiming that the company: "Was on the path toward a public offering soon, with revenue growth up 70 per cent in 2009 and EBITDA profitability this year, and that it would be cash-flow positive in 2010."
Whether Yu approved or disapproved of that memo on his way out the door is not known.
There have long been rumors of unrest among Facebookers. Some have swirled around Yu's reportedly tense-but-improving relationship with chief operating officer Sheryl Sandberg.
Others cite Yu's tussles with Facebook founder and chief executive Mark Zuckerberg. Swisher wrote: "Yu is known internally to be more conservative fiscally, pushing on Zuckerberg to ramp ad revenue more quickly and to consider a range of options outside of IPO, including selling the company."
Zuckerberg no longer needs to worry about Yu's "pushing," now that he's searching for a new CFO, possibly one who better agrees with his vision for Facebook's future. Top-tier position-shifting, however, is nothing new at Facebook. For example, Zuckerberg began tempting away a series of Googlers beginning in late 2007, including Sandberg in March 2008, followed quickly by Elliot Schrage, who became Facebook's vice president of global communications, marketing and public policy in May.
Apparently, whatever - or, perhaps more-accurately, whomever - Zuckerberg wants, Zuckerberg gets. And what Zuckerberg wants right now is a CFO who'll help him ramp up to an IPO - despite the fact that some analysts think that the bloom is off the social-networking rose. Building up a massive user base is one thing, but finding a way to monitize it is another.
That said, Facebook is no Twitter - it actually has an ad program that's crafted to target ads based on its users' demographics - and, speaking of demographics, a majority of Facebook users are males between the ages of 18 and 34 years, a much-prized demo among advertisers.
Whether or not Facebook can parlay that clout into a successful IPO is unknown. What is known, however, is that the finances of any publicly held Facebook will be managed by a new CFO. ®