Publishers Ask Facebook Executive 'WTF?'

Sheryl Sandberg of Facebook The astounding rise of the social networking phenomenon rightly has many traditional media executives wondering, "WTF?" or perhaps more accurately, "HTF did you do that?" So observed BusinessWeek Editor Steve Adler, drawing laughter as he introduced Sheryl Sandberg, the chief operating officer for Facebook, at the American Magazine Conference in San Francisco on Monday afternoon. Sandberg had plenty of advice for magazine publishers, but was also careful to distinguish their functions from Facebook.

She began by recognizing the important role of magazine journalism, noting that there are over 150 million active blogs, but adding that "not all content is created equally--there is content that is well-researched and well-edited, and these sources become even more important for understanding a very complicated world" filled with conflicting views and opinions. But she also noted: "We're not a content site. Our mission is to give people the power to share information with each other." And it just so happens that "they often do that through content," including sharing magazine articles.



But for content to be part of users' online lives, they have to see it first, Sandberg reminded the audience. Asked which sites are doing a good job with purveying content, she steered clear of magazines and pointed to the New York Times online, as well as Google News and the front page of Yahoo, for allowing users to customize the news they receive.

The key value here, Sandberg said, is "the ease with which I can find content"--for example, Google (her former employer) at one time measured its utility not by how long users were on the site, but how quickly they left the site, having found the information they sought.

By the same token, magazine Web sites and other online publications are in a different line of business from search, Sandberg acknowledged--one that has yet to be effectively monetized. "Where online has been successful is the monetization of search: people know what they're looking for, they look, they buy, and you can trace what everyone does from that first click to the last. That's demand fulfillment. What hasn't been figured out is demand generation."

Social network sites and magazine sites are ideal candidates for demand generation, Sandberg said, but success depends entirely on the advertising model: "I'm excited about a lot of the content online, because where people spend their time online is the logical place to advertise. The way we're thinking about monetization is--we'll look at what people do on our site, and have advertising that is part of the experience." Here she warned that "interruptive advertising is hard. A better model is advertising that's integrated into the experience."

Facebook provides some valuable models for magazines in terms of building audience and engagement, according to Sandberg, who advised that "pushing information to users is a big part of what makes success on the Web." In this vein, she recalled that after the controversy died down, Facebook's Newsfeed--a scrolling report with updates about other members of a user's social network--has "actually been one of the things that really makes Facebook work." For social network sites and magazines alike, she went on, "getting information to people where they are is the main challenge in the long run, and also the main challenge for monetization."

However, Sandberg also recognized that the imperative to push content through various platforms may clash with many magazine publishers' desire to retain control of their proprietary content. On the one hand, "the more people can do links, the easier you make it to share your content, and the more viral that content becomes." But on the other, "I understand that because the financial pressures are very real, there's the focus on keeping your own content in a walled garden." She had no specific advice about resolving this contradiction, except that "the relation behind them has to be worked out very carefully."

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