American Magazine Conference 2008

Facebook COO: Web Needs New Model, New Metrics

Social-Networking Site Points to MTV Promotion of Video Awards as Way to Use Online Ads to Generate Demand

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SAN FRANCISCO ( -- Facebook's latest attempt to finally get some real ad revenue has shown early signs of promise, Chief Operating Officer Sheryl Sandberg told an audience at the American Magazine Conference in San Francisco yesterday.
Sheryl Sandberg
Sheryl Sandberg Credit: Doug Goodman

Facebook, a site that's successfully accumulated a large group of active users but hasn't quite found a business model yet, has been testing an interactive product that draws willing consumers into the advertising itself. MTV tried it out to promote its latest video music awards, posting clips of Britney Spears, for example, and allowing viewers to post comments about them. Those comments then appeared in other users' News Feeds, the Facebook function that tells you what your friends are doing and saying.

"The results were really positive," Ms. Sandberg said. MTV not only got some attention for its awards show, it learned a little about what viewers wanted to see. It and other networks have subsequently said they want to try using the product earlier, to make the most of that feedback, she said.

If it takes off, the product could help unravel a very big knot in the world wide web. "The monetization question on the web is a very big and open one," she said. Google and its competitors have made answering demands for information very profitable by selling ads attached to search requests, or demand fulfillment, Ms. Sandberg a former Google executive herself, noted. "What no one's figured out how to do is demand generation," she said.

"We need to find a new model and new metrics," she added.

In another recent innovation, Facebook recently released a product called Facebook Connect that helps you bring your Facebook contacts into other sites' communities, Ms. Sandberg said. That would also help keep Facebook involved even when you socialize elsewhere online -- without trying to force users back to the main site itself. "Walled gardens don't work," she explained.

Many users, meanwhile, are loudly complaining about Facebook's latest redesign, but Ms. Sandberg didn't seem too worried. "People are using our product to protest our product," she said, noting that a protest group is now the fifth largest on Facebook.
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