Facebook, Inc. (NASDAQ:FB)
Annual Meeting of Stockholders Conference Call
May 22, 2014 2:00 PM ET
Colin Stretch – General Counsel and Secretary
Mark Zuckerberg – Founder, Chairman and CEO
Sheryl Sandberg – COO
Elliot Schrage – VP, Communications, Public Policy and Platform Marketing
Sister Mary Ellen Leciejewski
Reverend Jesse Jackson
Debra [ph] – Private Investor
Cowen MacKenzie [ph] – Private Investor
Braggy [ph] – Private Investor
John Lynn [ph] – Private Investor
Craig Polo Dibona [ph] – Private Investor
Hayle Husley [ph] – Private Investor
Rose Gackstetter [ph] – Private Investor
Good morning. Welcome, and thanks for joining us for Facebook’s Annual Meeting of Stockholders. I am Colin Stretch, General Counsel of Facebook and Secretary of this Annual Meeting, which I now call to order.
Let me run through today’s agenda. We will first focus on the formal business set forth in the proxy statements. Mark will then spend a few minutes talking about how Facebook is doing, and then we’ll have a short Q&A session.
Before we begin with the formal business, I’d like to remind you to please turn off all mobile devices, and I’d like to remind you of the rules of conduct for the annual meeting that was provided to you when you entered the meeting, including the rule prohibiting photos and recording of any kind. To conduct an orderly meeting, we ask that participants abide by these rules. Thank in advance for your cooperation.
Now, let me start by introducing the members of our Board of Directors who are here today. Mark Zuckerberg and Sheryl Sandberg, Marc Andreessen, Erskine Bowles, Sue Desmond-Hellmann and Don Graham. I would also like to introduce a few other folks who are in attendance today. Alex Bender of Ernst & Young LLP, our independent registered public accounting firm is present. And also present is Kris Veaco, who has appointed by the Board to act as the Inspector of Election for this meeting, and will tabulate the results of the voting. Ms. Veaco had executed the oath of Inspector of Election.
Turning now to the formal business of the meeting. I will first report on the notice for this meeting. I have a copy of the notice of the meeting, together with a declaration of the mailing and the proxy statement made available to all of Facebook’s stockholders of record determined as of the close of business on March 24, 2014.
I have a list of the stockholders’ entitled to vote at this meeting, which is available for inspection by any stockholder present or by any proxy holder representing a stockholder, and which list will be filed with the records of this proceeding. I am advised by the Inspector of Election, that the holders of shares representing at least a majority of the voting power of Facebook shares entitled to vote are present or represented by proxy here today, and a quorum is therefore present. This meeting is therefore authorized to transact business.
We have seven proposals to consider at this meeting, each of which is described in the proxy statement. First; we will address the election of our directors, each to serve until the next annual meeting or until the earlier of his or her death, resignation or removal. Second; we will seek the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2014. We also received five stockholder proposals to comply with the requirements of our bylaws and SEC rules and are therefore eligible to be voted on at this meeting.
The first of these proposal, number three requests a Change in Stockholder Voting. Proposal number four is a proposal regarding Lobbying Expenditures. Proposal number five is a proposal regarding Political Contributions. Number six, relates to Childhood Obesity and Food Marketing to Youth. And finally proposal number seven, is a proposal regarding an Annual Sustainability Report.
We will discuss the proposals momentarily. First, however I’ll remind you that the voting today is by proxy and written ballots. If you have already sent in a proxy and do not intent to change your vote, there is no need for you to cast a ballot today. Your vote will be counted automatically without any further action on your part. Any stockholder present who has not returned a proxy or who wishes to change your vote should cast a vote on the proposals to be considered at this meeting.
Does any stockholder wish to cast a ballot today, if you do, and if you do not have a ballot, please raise your hands and our volunteers will bring a ballot to you. Keep your hand up until you have a ballot in hand. And as we continue to pass out the ballot, it is 11:10 A.M. and the polls are now open. You may vote at anytime while the polls are open including during our discussion of the proposals on the agenda.
When you are ready to vote, please mark and sign your ballot accordingly. And once you are done, please raise your ballot in the air and our volunteers will come and collect them.
I will now review the proposals to be voted on by the stockholders at this meeting. And then we will take questions after we’ve heard of all of the proposals, including the statements by their proponents of the stockholder proposals.
The first item of business is to elect our Board of Directors to serve until the next annual meeting or until the earlier of their death, resignation or removal. The director nominees are; Marc Andreessen, Erskine Bowles, Susan Desmond-Hellmann, Donald Graham, Reed Hastings, Sheryl Sandberg, Peter Thiel and Mark Zuckerberg. The qualifications of each proposed director is set forth in the proxy statement. No other director nominees have been properly submitted for election pursuant to our bylaws or SEC rules. Therefore no other nominations maybe accepted. The Board of Directors recommends a vote for the election of each of the nominated directors.
The second item of business is to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2014. The Board of Directors recommends a vote for the ratification of the appointment of Ernst & Young LLP.
Moving onto the five stockholder proposals. These proposals and the company’s opposition statements are set forth in the proxy statement. The Board of Directors recommends a vote against each of the stockholder proposals for the reasons set forth in the proxy statement. The applicable proponent of the stockholder proposals will now be permitted to make a statement in support of their respective proposals.
I will call each of the proponents or their representative up, one-by-one to the microphone in the center aisle. And I would ask that each proponent of the stockholder proposal limit their statement to three minutes, and please do not include a reading of the proposal itself as the proposal and applicable stockholder positions have already been presented in the proxy statements.
So first with respect to proposal number three, Ms. Clare Ciervo, representing Mr. James McRitchie and Myra Young will make a statement.
Good morning. Proposal three, Give Each Share An Equal Vote, sponsored by James McRitchie and Myra K. Young at Elk Grove, California.
Resolved: Shareholders request that our Board take steps to adopt a recapitalization plan as soon as practicable for all outstanding stock to have one-vote per share. This would include all practicable steps, including encouragement and negotiation with family shareholders to request that they relinquish, for the common good of all shareholders, any pre-existing rights.
This proposal is not intended to unnecessarily limit the Board's judgment in crafting the requested change in accordance with applicable laws and existing contracts. By allowing certain stock to have more voting power than other stock, our company takes our public shareholder money but does not let us have an equal voice in our company's management.
Without a voice, shareholders cannot hold management accountable. The 2013 version of this proposal at Google won the highest votes ever for a Google shareholder proposal, 180 million yes-votes.
GMI Ratings, an independent investment research firm said, Facebook's complex, dual-class ownership structure is a major area of concern. The holders of our company's Class B common stock hold approximately 96% of the voting power, with Facebook founder Mark Zuckerberg personally controlling 55%.
GMI said that since the beginning, Facebook's poor governance had been an unmistakable warning sign for investors to take heed. GMI was concerned that a founder and board member dumped the vast majority of his shares. Since May 2012, the total company stock sales for Facebook founding investor and board member, Peter Thiel, had eclipsed $1 billion.
Furthermore, top executives resigned in droves since Facebook went public. Facebook's Board consisted of two inside directors, two large investors, and four more directors who either have substantial related-party transactions with Facebook or were nominated to our board by Mr. Zuckerberg himself.
GMI said it's hard to point to a single director who has the long-term interests of our company's independent shareholders as their first priority. GMI said the corporate governance practices of the Facebook Board do not appear to be well aligned with sustainable shareholder interests. While directors are currently elected to one-year terms, this will revert to three-year terms should the voting power of the controlling shareholder fall below 35%, effectively offsetting the benefits of one-year terms.
Directors needed only one yes-vote based on our plurality voting standard, further inhibiting the ability of minority public shareholders to influence the election of directors. Facebook also lacked a committee for succession planning and the nomination of new directors. Please vote to protect shareholder value, Give Each Share An Equal Vote, proposal three. Thank you.
Thank you. Next with respect to proposal number four, Sister Mary Ellen Leciejewski, representing The Benedictine Sisters of Mount St. Scholastica. Sister, thank you for your attendance.
Sister Mary Ellen Leciejewski
Thank you. Good morning, Mr. Zuckerberg, fellow stockholders and members of the board. My name is Mary Ellen Leciejewski and I am representing The Benedictine Sisters of Mount St. Scholastica. I hereby move proposal number four asking our company to disclose a state and federal lobbying expenditures, including indirect funding of lobbying through trade associations and support for the American Legislative Exchange Council.
Transparency and accountability in corporate spending to influence public policy are in the best interest of Facebook’s stockholders. Lobbying is an important part of Facebook’s business strategy. Facebook spent more than $10.2 million in 2012 and 2013 on federal lobbying, and according to the Wall Street Journal, hit a record for its own lobbying with $2.8 million spent for the first quarter of 2014.
Our company argues that preparing a report of its lobbying would be cumbersome to apply, but Facebook is required to report its lobbying and it has this information. So it could easily be provided to share owners in a report.
Corporations can easily contribute corporate resources to trade associations or other organizations that lobby indirectly on their behalf without specific disclosure or accountability. For example, the Chamber of Commerce has spent more than $1 billion on lobbying since 1998 making it the country’s largest lobbying spender. But Facebook doesn’t even disclose its trade association memberships not to mention its trade association payments used for lobbying.
So Facebook stockholders have no way to know if Facebook belongs to the Chamber or how much of its trade association contributions are being used to lobby on its behalf. One organization that Facebook funds as a member is particularly surprising. Facebook supports the American Legislative Exchange Council or ALEC, which has a very partisan and conservative agenda on issues from voter rights to immigration reforms.
This proposal is asking for disclosure of Facebook’s payments to ALEC. Our request for disclosure is simply asking Facebook to show that its lobbying is being done for the company and stockholders’ best interest. Lobbying stockholders money that is being spent is our company stand behind the spending on lobbying, and if it does, then why doesn’t Facebook disclose its trade association memberships and lobbying.
Proxy advisor ISS reports this proposal. Facebook’s Board and its shareholders need complete disclosure to be able to evaluate the use of corporate assets for lobbying, and for any risks the spending can pose, we urge shareholders to vote for this proposal. Thank you.
Thank you, Sister. With respect to proposal number five, we will again here from Ms. Clare Ciervo now representing NorthStar Asset Management.
Good morning again. As introduced, my name is Clare. And I do work for NorthStar Asset Management in Boston. We are the beneficial owners of over 55,000 shares of Facebook stock. And I am here to ask your support of resolution number five.
Facebook’s mission as we all know is to “give people the power to share and to make the world more open and connected”. Because we are succeeding in this mission, our company is not just in the public eye [ph] of companies. It has become part of the public eye.
Our corporate brand and reputation are built upon the premise of sharing and our company knows firsthand the power of issues going viral. In order to protect our brand and shareholder value within the increasingly transparent world that Facebook has helped to create, we must ensure that our political giving is connected to the company’s public policy priority and so far our company has failed to do so.
Facebook’s CEO has stated that the company will support politicians who seek to further “open and free internet”. It’s the Facebook Political Action Committee has contributed to politicians seeking to censure the internet through the Stop Online Piracy and Protect IP Act. Facebook PAC contributed to three sponsors of the Stop Online Piracy Act as recently as last fall.
Facebook has a progressive consumer base, which supports Lesbian, Gay, Bisexual and Transgender rights as does Facebook stated company value. Yet Facebook had donated 41% of PAC contributions since its inception to politicians voting against LGBT rights. Despite Facebook’s public support to the environment, our PAC funds have supported at least eight senators that voted just last week against moving forward with an energy saving fund.
Our PAC funds have supported climate change deniers such as Senator Ted Cruz, who earlier this year stated on CNN, “the last 15 years, there has been no recorded warming”. And whose own energy plan includes repealing EPA regulations. Our PAC has also donated two years in a row with Senator and potential presidential candidate Marco Rubio, who 11 days ago in ABC News said that he does not believe human activity is causing dramatic changes to our climate, and that legislation aims at climate change will destroy our economy.
Facebook needs a quality to align our political giving inside brand [ph]. If we fail to resolve the disparity between what we stand for and which politicians we attach our brand to, we run the risk of one of our billion active users exposing topography for us. We run the risk of management appearing out of touch and unaware, thereby causing shareholder value to erode.
To encourage management to protect our brand and our shareholder value, we ask you to vote yes for resolution number five. Thank you so much.
Thank you. With respect proposal number six, Sister Susan Vickers representing The Sisters of the Holy Names.
Good morning, Mr. Zuckerberg, members of the Board and shareholders. I am here today representing The Sisters of the Holy Names and other co-filers of proposal number six.
Obesity in youth which has lasting health repercussions and vast economic consequences remains a great public health threat. In this context, carrying extensive food marketing to use as Facebook does, exposes the company to significant regulatory and reputational risks.
Food marketing influences children’s diet and thus has been intensely scrutinized by Federal Agencies, Congress, the American Academy of Pediatrics and the World Health Organization. The food industry is spending an increasing proportion of its marketing dollars to advertise to young people on social media.
Facebook offers marketers access to an amount of personal data from young users that is unparalleled within the universe of social media platforms, subjecting Facebook to potential additional risk from regulation as well as litigation.
And finally, Facebook has indicated that it is considering opening its platforms to children of ages 12 and under. We urge shareholders to support for this proposal, and we reiterate our request of the company’s senior management to meet with the concerned investors on this important issue. Thank you.
Thank you, Sister. Finally, with respect to proposal number seven, Mr. Patrick Doherty, representing the Comptroller of the State of New York.
Mr. Chairman, fellow shareholders. My name is Patrick Doherty, and I am here today on behalf of the New York State Common Retirement Fund to introduce the fund’s resolution calling on Facebook to issue Annual Sustainability Reports examining the company’s environmental, social and governance policies and practices.
Environmental, social and governance issues can pose significant risks to U.S. businesses. And without adequate disclosure, shareholders and analysts cannot determine whether the company is managing those risks properly.
The majority of Fortune 500 and S&P 500 companies already recognized the value of comprehensive sustainability reporting by regularly issuing such reports. We believe that Facebook could throw in their number and therefore on behalf of the New York State Common Retirement Fund, holders of 313,695 Facebook shares, I submit the resolution on sustainability reporting found on your proxy materials. Thank you.
Thank you. We will now provide responses to the stockholder proposals as they have already been set forth in the proxy statement. I will however now open up the floor for questions, specifically on the proposals on our agenda. If you have a question against specifically relating to any of the proposals, please line up behind the microphone in the middle of the aisle.
We ask again at this point that you restrict your questions to proposals being voted on in this morning that you limit your question or statement in support of to one minute. There will be an opportunity to ask general questions about Facebook later after the business portion of the morning. If you have a question related to the proposals but cannot get to a microphone, please raise your hand and someone will bring a microphone to you. Sir?
Yes. My name is Shelton Ehrlich. I am a shareholder since the IPO. Thank you for making me money. I’d like to comment as a conservative, and I found these proposals to be nonsensical. ALEC was a fine organization, nobody objected to it until they suggested that people who vote should prove that they are citizens.
The argument that the world has warmed in the past 15 years is negated by the evidence. If you look at the comparison of the models with the global temperatures, there has been no net increase in the past 15 years. No amount of argument will deny that fact. I’ll have some more to say later.
Thank you. Are there any other questions relating to the specific proposals? Sir.
Yes. May I direct some questions to the Board of Directors, nomination of the – is that proposal one, or is that not the time to do that.
Yes, if you have a question relating to the Board nominees, now would be the right time.
Okay. I don’t know the position of the members of the Board on notifying Facebook users about potential lawsuits, and their position on Facebook engaging in litigation to silence critics, maybe engaging in SSS litigation. And I think that some companies in the Silicon Valley have engaged in lawsuits to silence and critics such as Varian and some other publicized lawsuits. And I was curious if they had some kind of general commitment or some kind of guiding principle to urge Facebook to avoid such lawsuits to silence on their individuals. And I am sorry, but I don’t know the policy for notifying Facebook users about account being subpoena in a civil lawsuit and sometimes in litigation, in discovery, Facebook will get a subpoena. And I wanted to know the legal extent to which Facebook was committed to notifying the users about their IP addresses and identity gain on that.
Thank you. So the Board’s goal is set forth in the corporate governance guidelines. It does not extend to making determinations as to the specific questions you raised. The qualifications for the directors themselves to perform the function set out in the corporate governance guidelines, in particular, providing strategic direction to the company are set forth in the proxy statement and we’ll be voting on that basis.
With respect to your specific question about the company’s policy as to notifying users, as to when the contents of their account are being requested in connection with law enforcement investigations. Those are set forth in our law enforcement guidelines, which you can find publicly available.
So we’re going to ask each stockholder to address one question, so that others may have an opportunity. If you have general questions about that or other Facebook policies, you’re certainly welcome to step to the micro in the general Q&A section, which will follow the formal business of the meeting. Thank you.
Hello, I have a question regarding proposal number three. The speaker said that by virtue of the Class B shares, the other executives have ten-to-one voting rights over other shareholders. And by virtue of that Mark himself has 55% of the voting rights. If that’s true, then why are we even handing our ballots for people here to vote, because basically Mark can decide what he wants by voting and counting our ballots.
So as everyone knows, Mark is our founder and our CEO, and it’s been his vision and leadership that has guided the company so far and been a substantial contributor to the company’s success. We believe that voting structure enables the company to focus on the long-term, which will continue to be a contributing factor in the company’s success.
With respect to stockholder voting, it’s an important part of the American corporate structure and we intent to honor it here. And we’re delighted so many people came to share their views with us.
Are there any other questions specifically related to the proposals?
So that concludes the discussion of the proposals. We will now collect any remaining ballots. Again please raise your hand with your ballot in the air when you complete your voting and our volunteers will come around to collect them. Any other ballot that needs to be collected? One. Anyone else? If you are still completing your ballot, you can raise your hand as well and hold on. We’ve got one. Okay. Anyone else? Madam are you – is she done? Yes, okay. Almost. Great, thank you.
Okay, all votes have been cast on the proposals to be considered at the meeting. And as of 11:35 A.M. the polls are now closed. I will now confer with the Inspector of Election and report on the preliminary results of the voting.
Okay, the vote required to approve proposal one is a plurality of the voting power present in person or represented by proxy at this meeting, which means that the eight nominees receiving the highest number of affirmative votes will be elected to the Board. Based on results as tabulated by the Inspector of Election, each of the eight nominees on the ballot received the highest number of affirmative votes cast, and therefore each of the nominees has been elected to the Board of Directors.
The vote required to approve proposals two through seven is the majority of the voting power present in person or represented by proxy, with respect to each such proposal. Based on results as tabulated by the Inspector of Election, the proposal to ratify the appointment of Ernst & Young LLP, proposal two, has been approved by at least the requisite majority of the votes cast. And each of the stockholder proposals; proposals three through seven, has been rejected by at least the rejected – the requisite majority of the votes cast.
There are no other formal items of business before this meeting. Final results will be reported as stated in the minutes of this meeting and filed with the Securities and Exchange Commission on a Form 8-K within four business days.
This concludes the formal part of our meeting. And the Annual Meeting is now adjourned.
Now before I ask Mark to come up to the stage to share some thoughts on the company and to engage in Q&A, I would like to remind you that Mark’s presentation and the Q&A that will follow may contain forward-looking statements regarding future events and the future financial performance of the company.
We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements in the presentation and the Q&A to follow. These risk factors are more fully detailed under the caption Risk Factors in our Quarterly Report on Form 10-Q filed with the SEC on April 26, 2014.
In addition, please note that the date of this Annual Meeting is May 22, 2014. And any forward-looking statements that we make today are based on assumptions as of this day. We undertake no obligation to update these statements as a result of new information or future events. Mark, over to you.
All right, thanks to all of you guys for coming out today. This is an important tradition that we have, and we think it’s really important that we get in front of all of our shareholders and have an opportunity to answer questions directly. So I’m going to keep my upfront comments pretty brief, so that way we can spend as much time as we can on questions and answers from you guys directly.
Before we jump to that, I want to just give an overview on how I think the last year has gone since our last shareholder meeting and give some highlights on what focused on and how we think the next few years are going to go. So the last year has been a pretty exciting and good one for us overall. 2012 was about starting to make this transition to mobile and starting to get our product ready for mobile. 2013 was really the year that our business became a mobile business.
We now have more than a billion people using our products on mobile. That’s 55% of people use Facebook everyday use it only on mobile phone. Almost 60% of our revenue in business comes from mobile at this point. So I think it’s really fair to say that we’ve made this transition. So now the majority of our business and the way that people use Facebook is on mobile, and that reflects a lot of hard work within the company and we’re really proud of that. And I think as shareholders, we should all feel good about that.
Going forward, we’re really excited now that we have our business in a strong place to really focus on building some new mobile first products and experiences. So if the last couple of years have been about getting the way that people use Facebook to work really well in mobile, now we think we can focus on some new things that will deliver more value to people over time.
This has been also an interesting year of reflection for us. It’s been our 10-year anniversary in terms of running the company. We started in February of 2004. So we just did our 10-year anniversary. And we’ve accomplished pretty amount in the last 10 years. Connecting more than 1.25 billion people, building a business that we’re really proud that, that’s generating a lot of profits for ourselves and shareholders.
And when we look forward to what the next 10 years have, a lot of its going to be about helping people connect and do more in the ways that we’ve already helped in the last set of years, but we also want to make sure that we have some big or decent goals that we’re trying to set forth, so how we want to change the world over this period as well.
So as a company, we primarily talked about three high level themes for the next 10 years; connective everyone in the world, understanding the world and kind of everything around there for people, and helping to building the knowledge economy for folks. And these three themes, I’ll go into in a little bit of detail and then we’ll get to Q&A.
Connecting everyone I think is actually pretty straight forward, right. We’ve connected about a 1.28 billion people so far. There is about seven billion people in the world. We have our work cut out for us. We have a lot more to do. And we’re going to focus on doing that.
And there are some challenges ahead, because, of that two-thirds of people in the world don’t even have access to the internet. So those are natural feeling on how much we can do just connecting people who have a data connection on their phone or computer. So we’re going to keep working on that, but we also have this effort that we call Internet.org, which is about making sure that everyone in the world gets access to the basic internet connection.
And this is a program that we’re investing a lot in, and we think it will get to the world as well get up on the internet and will also overtime be good for Facebook as we can grow the number of people who are connecting throughout the world. That’s kind of right what you’re thinking on getting everyone onto Facebook.
We also want to deepen the way that people connect on our service. And through that we’re really focused not just on building the main Facebook service what we call internally the Big Blue App, but building different services and different apps that people can use on their phones for sharing and connecting in different ways. So you may use the Facebook Messenger App, more and more people are using that. More than 200 million people use this for daily texting and chatting. That’s growing quickly.
We also have made a few acquisitions including Instagram, which now has more than 200 million people using it for sharing photos and videos with their community, which is often a different community than people have on Facebook. And we recently announced that we are going to acquire WhatsApp, which has more than 0.5 billion people using it primarily for SMS, mostly outside of the U.S. and abroad, so that’s growing quickly as well. So those four services in addition to a handful of other ones that we’re planning on building will make us that people can – that will not only going to increase the number of people are connecting, but also deepen how they connect through our services.
Moving onto the second theme of helping to understand the world, I’ll hope over the next five to 10 years that on Facebook – people aren’t just using it to share and communicate, but also can help answer real questions and solve problems that they have in the world, that you don’t typically think of a social network that’s helping you these days. So whether you need a recommendation for a plumber to come fix your home or you’re looking for a recommendation of a hotel to stay in when you’re on vacation. There were lot of things that – it’s something difficult to use web search to find answers for today what your friends think about different things, not indexed by any web search engine today, but those are things that we think if you can build a social network to be able to do. And we’re pretty early in the journey towards doing that, and that’s going to be a multiyear voyage to get there, but we think over a five to 10-year period, we can deliver a lot of value for people and ultimately shareholders by doing that.
The final theme that I want to talk about is building the knowledge economy. And what we really mean by this is we think of this theme in the world where more people are using information to do their jobs on a day to day basis. And what we see in our business which is primarily advertising is that large companies have a lot of insights so that who their customers are and can use that, that markets them effectively and build personalized products and all kinds of different things.
And what we found is that a large part of our businesses not only serving large advertisers and customers, but also a lot of small businesses. And we’re really proud of that millions and millions of small businesses who use Facebook to be able to sell their products to people and grow and learn about their customers as well. And a big part of our goal part is to make it so that every small business owner has the same tools and insights about the people that they serve as large companies here.
We think that the world will be a better and more democratic and stronger economic place if all small businesses have those tools. So that’s a big theme of what we’re focused on as well.
Now, there is one more thing that I wanted to talk about before we go to Q&A besides these three big themes in the next 10 years of connecting everyone, understanding the world and building the knowledge economy. And that’s what kind of culture I think we need to build in Facebook in order to achieve these goals over the next 10 years.
So we’ve talked a lot about hacker culture that we have in Facebook. And what we mean by that isn't that we’re hacking into things, that’s a different definition of hacking that we strongly do not condolence [ph], but what we mean when we say hacking is the MIT definition, which is people messing around experimenting is a way of building things, trying something seeing what works, trying something else, tinkering a lot until you come up with something that serves people really well.
And that’s been a really good approach for us overtime. And it helped us move very quickly and build a lot of different things, but when we found as our culture is very internally focused. When we talk about our hacker culture and our culture of building, it’s all about how we do things and it’s not about the people we serve. And we have a stated goal inside our company which is to build a culture of loving the people we serve, although it’s more than billion people who use our services that is as strong, if not, stronger than our internal culture of how we build things.
And we think we need to do that over the next 10 years in order to actually achieve these goals of helping to connect everyone and understand the world and help build the knowledge economy and the economy that we all want.
So we’re really excited to do that. And a lot of what we started to do is just looking at the problems that people have using our services and trying to fix them. And some of the problems are really basic things like content upload as quickly as people want. So we focused a lot on making that grow quickly.
But one of the biggest themes – feedback that we hear is that people always want to make sure they understand how they are sharing content on our service. So recently we’ve taken a bunch of steps to make it a lot more clear to folks who they are sharing with and give them even more control than they’ve had in the past, including just this morning we announced that we’re launching this privacy checkup for everyone on Facebook.
So now when you post, we’re going to have this thing pop-up that kind of suggest you, hey, here is who you are sharing with. Is this who you want to be sharing with? Like, we hear some different audiences that might be – if we think that you might be sharing more broadly than you intend to be, I am suggesting that maybe you share with a few fewer people maybe just to your friends. And this we think it’s taking our responsibility seriously to make sure that people have control over who they are sharing with.
And over time, we think that that is going to serve everyone who is using Facebook better and help us achieve the long-term goals that we have, but this is an important symbolic shift for our company taking – lumping the people who we serve as seriously as our own internal culture of building things, which we’ve been very proud of over the last 10 years.
So I just wanted to close with that. And now I guess will invite Sheryl and Elliot and David up to help answer questions as well.
So we will shortly open for general Q&A. We anticipate taking questions until approximately 12:15. The queue is already formed, so please go ahead and lineup. One moment please. So that we may answer as many questions from as many stockholders as possible, we request that you only ask one question.
Before we open it up to general Q&A, we’re honored to have with us the Reverend Jesse Jackson. And I’d like to invite Reverend Jackson to the microphone to make a statement and ask the first question.
Reverend Jesse Jackson
Thank you very much. Good morning to you, Mark, with your special genius embedded all of us. We have landed particularly Silicon Valley foundation. You’re on a potential position on progress and the NSA was grateful for that. Sheryl for your book, Lean In, which we will need autograph copy on today. David and Erskine, Marc Andreessen and [indiscernible], Donald Graham and the Board members. I want to thank you for the opportunity to present to you today, and ask all of you to give a special moment of silence for all the girls lost in Nigeria somewhere. Just today, a young woman who had been kidnapped more than over 10 years was found on Facebook. And for that, we are grateful for this special technology, but for the girls of Nigeria, shall we give a moment of silence, amen. I was stopped at [indiscernible] in Delaware here today. They may never have used a mobile phone not to change, let alone witness the wonders of Facebook and other technology transforming our world. What they fought for and died for devote the [indiscernible] armed attack, the rapid rise and access to guns has too much violence, hatred and fear.
I speak to you today representing the Rainbow PUSH Coalition, about the need to open up a new era of growth and inclusion of African Americans, Latinos and other people of color in Silicon Valley’s technology industry. Inclusion leads to growth, and when there is growth, everybody wins. Facebook is uniquely positioned to lead this new era. We won’t know how good Silicon Valley can be until everybody can participate. All we ask is that everyone plays by one set of rules, and that there is an even playing field for all. It’s the moral imperative. We want mutually beneficial two-way trade. We share consumer patterns together, pay taxes together. We serve in the military together to keep our nation secure. We should share in America’s opportunity and growth together. Today, there is an imbalance. Too much one-way trade, too many left out, too many gaps between the surplus and depths with cultures just are changing. Those who are left our represent money, market, talent and location. You have technology, expertise and resources. We can all win if we close the gaps. African American and Latino colors will comprise a huge and fast growing part of your customer base.
In a short period of time, minorities will comprise the new majority population in California. Technology is supposed to be about inclusion, but sadly patterns of exclusion remains the order of the day. Let me state some facts. The zero Blacks and Latinos and the C-Suites all too often. Tech powerhouses including Facebook, Apple and Google, new media companies like Twitter, have zero Blacks on their Board of Directors. In the C-suites, Facebook, like Facebook, Twitter, Facebook, Apple and far too many companies have Zero African Americans on their boards or Latinos in their leadership positions in the C-suites. And just when the leaders are now making their headway like Sheryl, and Marissa Mayer at Yahoo, probably Facebook must build a pipeline for an African Americans and people of color to lean in and move up to, schools cost less than jails. If we can't find them, then roll it out. They really do exist. Please take another step front and find us when they need consumers of technology. They can be found as CEOs and CFOs and laureates and engineers as well.
We could send to work with you in that search to find them. We really know where they are. Rainbow PUSH out an Inclusion Report on the Debt Capital Markets: A Ranking of Corporate Issuers. We applaud Facebook, which under David Ebersman’s leadership included several minority, women and people of color in your initial IPO and for that we are grateful.
Sir, I’d ask you to respect the questionnaire. Thank you.
Reverend Jesse Jackson
When it comes to minority inclusion in employment, procurement, professional services, advertising and marketing, Silicon Valley has a long way to go. There are just simply too many gaps. I am making this appeal to you today, because I am convinced that we are a better American, all of us are involved together. These questions I’ll leave with you today. With Facebook voluntarily and club that thing, release your yield wonderful, update on the recent general makeup of your workforce. At least would make a commitment to include Blacks and Latinos on your Board of Directors? Specifically, would you agree to place the bylaw and amendment similar to Apple that will require an explicit and active search for women and people of color for all of your Board openings? Will Facebook commit to a bylaw provision to mandate that women and people of color are included as part of any search for C-suite level positions? Facebook commit to the inclusion of Black and minority firms in all debt offerings and future financial transactions, and building pipelines for education.
Let me express this profound sincere thanks to you today. What you’ve done in 10 years is no less than a global revolution. The face of this new America is not the back. It’s not [indiscernible] it’s not Detroit. It’s high tech. It’s Silicon Valley. It’s you. We’ve gone when various special ways of think about the kings. You worked at 26 [indiscernible] he was at 28. How blessed you are at such a young age to have such a special genius. And therefore bring us opportunity to lead us to higher ground and where the government never will but you can and you must. And thank you very much.
Reverend Jackson, it’s an honor to have you here, and we thank you for your support, your appreciation of our technology, and also your very strong words on the importance of diversity. We agree with you. We have a community that's over 1.2 billion people around the world, and that’s an incredibly diverse community. And it is good for us, and important that the people who are building Facebook represent the community we serve fully. And that means for representation of all kinds of people who have historically been underrepresented.
We’ve taken this quite seriously. Over the past year, we’ve set up our first very explicit diversity hiring and diversity program under the leadership of Max Dean [ph] who is here with us today. And we are in the early days of what we’re doing, but I’ll share a few words on where we’re focusing at first and where we intent to grow.
So our focus right now is really on trying to hire more people into the company, as well as grow their careers. And so we do this in three years. We have built a number of great partnerships, groups like the National Society of Black Engineers, the Hispanic Alumni of Georgia Tech, Grace Hopper for girls who code, Management Leadership of Tomorrow. And these partnerships have been great, because they are really helping us get great candidates and reach out.
We set-up last summer for the first time our own Facebook U, Facebook University, which is a minority and women gets paid summer internship program looking for candidates who don’t necessarily have already the coding skills that we normally hire in, but people who we believe we can train. And we had a really successful summer getting people up to speeds who had great technical skills in the areas we needed them, and we’ve grown the program by 60% this summer.
We’re also working really hard in our internal recruiting programs. We believe, as you do, that transparency is really important. And we’re on a path to get there. We’re looking at our numbers internally. We’re seeing growth already from what we’re doing and we would like to be on a path to share them, both internally and eventually return…
Reverend Jesse Jackson
Was that EEO?
Where we are right now and I think other companies you’ve talked to and have been to their shareholder meetings have got the same thing, but really important to share those numbers internally and eventually do that externally and we’re on that same path that others are on.
When it comes to Board candidates, when and if our Board expands, we are very committed to looking broadly including looking at candidates with diverse backgrounds. And on minority on firms, they participate in our IPO and we continue to keep in touch with them for future opportunities if we have other capital we think.
We also I know have had some contact with you, I know Max Dean [ph] and our CFO had a chance to sit down with you. And in all of these days, I think we’ll look to you and others for candidates, but again we really want to say that we are great how important that is and we’re grateful that you are here with us today.
Reverend Jesse Jackson
Sheryl, as I lean in please light me onto...
So then you’ll put yourself and Mark, both.
Reverend Jesse Jackson
I’ll say that same thing again [indiscernible]. The reason why I pushed so hard on C-suite expansion and inclusion, we didn’t how baseball could be delivered by the good play, we just really didn’t know. When we come from in the firm, there is a new sound now, because the walls are down, people behind the walls, probably were doing right well. You couldn’t have had the [indiscernible]. All the cowboys and the checksums – you couldn’t have had – the whole new world has changed because the walls came down and we come today not so much in process because the feel of partnership, because we know that partnership works and everybody includes everybody grows. Thank you so very much.
We’ll take our first question from the audience. Thank you.
Thank you. I am neither a tax advisor, an accountant or an attorney. I am just one of those crazy anti-spammers who like seeing spammers crushed. And I do appreciate the $711 million judgment against Sanford Wallace. But from what I’ve read, you’ve recognized that is pretty much unenforceable or at least for a good amount of the money because you doesn’t have it, or he did it very well. And I am thinking to be nice. You may want to forgive a couple of hundred thousand of it and send him a 10.99 and let the IRS harassment until the end of eternity, because it is a taxable event. Thank you.
Thank you. I can assure you that we’ve not certainly committed that it’s uncollectible and we’re doing our best to collect it. And will generally I think the sentiment about keeping the site and keeping the internet secure from bad hackers is when we certainly hope there and we have a solid cool folks who are working on that every day.
From what I’ve seen at IRS, they are probably lot more effective than your legal team in getting money and putting people in prison.
It’s a great idea. Candidly, I hadn't thought of it and we’ll take it back.
Hello, my name is Shelton Ehrlich. I want to thank Mark for – I’m a Palo Alto resident. I wanted to thank him for raising our real estate values. My question is regarding shareholder proposals. I talked to the CFO before the meeting. I think that this company should try to get some of them kicked out by petitioning the Securities and Exchange Commission. Only one of these proposals, number three has relevance to the company’s operation dealing with voting. The rest are manipulations of this meeting to make political statements. The representative of the Comptroller State of New York spoke about sustainability. He is really here to get publicity for his boss, so that he can run for a higher office. That’s happened in the State of New York and there have been some very bad governors. Thank you.
Thank you. Next question?
Debra [ph] – Private Investor
Hi. My name is Debra [ph], individual shareholder from San Jose, California. My question would be, does Facebook dividend paying now, if not, will Facebook consider paying dividend to their shareholders in upcoming years, etcetera?
Unidentified Company Representative
Thank you for your question, Debra [ph]. So we take very seriously the work we do to ensure that we invest every dollar wisely in trying to grow the company, and that we’re very careful with all uses of shareholder capital and capital that we get from operating the business.
At this time, our focus really is on using the cash we have to invest in growing the business and to trying to build some of the things that Mark described during his remarks. So we don’t pay a dividend and don’t anticipate doing so in the near future. As the company matures and grows, we look forward to having conversations about what the best use of our capital
Debra [ph] – Private Investor
Okay. Thank you.
Hi, I know Facebook does business throughout the world. And my question is, to the extent legally possible, does Facebook notify its users as soon as possible about a civil, not a criminal, subpoena for their identity and information within their Facebook account? And if Facebook does not notify the users as much as legally possible, I just like to know, why as is the case?
So thank you for your question. So with respect to civil litigation, our policy is that account content are not available via civil subpoenas unless it involves the parties to the litigation in our policy. And that standpoint is that people have access to their own accounts and if they are liable – if they are subject to a request like that in litigation, they can access their own materials. That’s the policy we see to enforce it in courts throughout the country and throughout the world.
So that means in a lawsuit against Jess John Doe [ph], where there is no named defendant, you would not produce any information or subpoena rights from the potential lawsuit?
So that would be our policy and we would speak to assert that position in court and then it’s ultimately up to the judge. If you have a specific issue, we’d certainly – feel free to reach out to us and we’ll try to address it as best as we can.
Okay, thank you.
Cowen MacKenzie [ph] – Private Investor
Good morning, everyone. My name is Cowen MacKenzie [ph]. And I guess it’s quite a difference from last year to this year. So I guess your guys are doing a lot. Thank you. I guess Mark and Chairman, who said that. I am glad that you guys have opened your door to communication. Thank you very much. My question is really about Facebook advertising. When will I be able to talk to someone? So if I have an issue with an ad that I posted, right now there is isn't any way to talk to anyone. If I give you a feedback, it does says, we accept your feedback, but there is no – and I can't talk to anyone. There is no email in, there is no phone calls, there is no address. And you say advertising is your big thing. So we need to talk to someone.
Well, I think we’d be happy. We have someone here who can talk to you. We’ll do that right after the meeting. And in general, advertising is important to us. And we have over a million advertisers. And so we try to provide service online, so they are able to answer questions, but we’re not – we should speak to them or happy to speak to you, we’ll make sure some of that.
Okay. And I just hope there is something online that we can – for everybody else. But thank you, I appreciate.
Yes, so after today, I guess we have people with Facebook shirts around. So if you have a question about the service or advertising just make sure that you find one of them and then we’ll definitely reach out to you and try to help you with whatever issue you’re having.
Hi. It’s [indiscernible]. I’ve been a technology investor for 30 years, and I don’t use to come to annual meetings, and this is really why. We own 3 million shares and we’re very happy. They weren’t let me bring my bag in. So I have to write my notes on my phone. First of all, Mark, I want to thank you for doing AGM for absolutely building remarkable company. We’re delighted to be shareholders. The Facebook is known for its efforts [ph] and you’ve done that perfect. Move Fast and Break Things. We make money to make great services. We don’t make great services to make money. That aggressive thinking is what allowed you to create the online advertising business, branded business. And through remarkable seeing the last 12 months is the transition the company from desktop to mobile. You outlined three very ambitious goal in your comments earlier, but an FAQ said we’re going to move fast with stable infrastructure and you’ve made two very sizable acquisitions this year in dollars, but between two of them it’s about 150 million people. Some truly great people, but you’ve got great people too. The company celebrated its 10th anniversary this year, and you celebrated your 30th birthday. And you think about the next decade. The company has the balance innovation with risk-taking I guess little bit differently than before. Could you talk about that balance and how we don’t move what we created in the last decade?
Yes. So I guess the one philosophy I have on running a company is that you get to choose what you emphasize, right. And at the end of the day, you get what you put your time into and what you put your money behind. And one thing that we’ve always cared about is moving fast. Technology companies have this interesting property, where there is some things that benefit as they grow, right like we have this bigger community and that’s valuable because now new people signing up and have all the people they want to connect with are generally are going to be on Facebook. But at the same time as the company grows, the company is actually gets broader, right.
So what we’ve aimed to do is how Facebook always be very fast for the number of people that we have, right. So right now, we have less than 10,000 employees. Every other company that I can think of that serves anywhere near the number of people that we have has tens or hundreds of thousands of employees, right. So one way that we move quickly is just by trying to stay lean, but it’s always an ongoing effort and you have to make trade-offs in order to be able to move quickly. So historically one of the trade-offs that we made was we tolerated some defects in the product, all right.
So we said it’s okay if the product isn't a 100% perfect, because as long as we can move quickly and learn quickly, then we’ll end up building a better product for people over time, even if today there is a flaw or some small flaws in the product. What we found over time is that now we have so many people who are building at Facebook that when they are small issues, people then have to go back and fix those issues and it actually end up taking more time if you develop with these flaws, then if you just did it correctly the first time.
So now we are choosing to make a different set of trade-offs. And instead of move fast and break things, which typically meant move fast while allowing some flaws, what we’re doing is moving fast by instead building really good stable infrastructure on top of which we can build really quickly because we have good solid infrastructure and that allows you to move around and do different things very quickly. So now our strategy for moving quickly has really been about investing upfront in building the best infrastructure and tools to enable us to develop in the industry that we think we’re going to continue to lead in that and we think we’re going to continue to be able to move very quickly because of that.
My name is [indiscernible] and I am from Oakland, California. I am actually here to alert the investors about e-trading, which keeps the price of the share down forever. E-trading is equivalent to using sports enhancement drugs for athletes, which is not allowed because it’s not fair to others. E-trading is like an enhancement for those people who use it and it puts others in a very untenuous situations not being able to compete. And my observation is that the stocks should have been $100 to $150 today but the electronic trading constantly sucks out the profit within seconds and it goes up and down, going up and down and you’ll never make it beyond a certain number as long as that system is being used and it’s not fair to most investors. I have an envelope here for Ms. Sandberg if it’s okay.
Sir, why don’t you give it to one of the volunteers wearing the Facebook shirt. Yes, there. We’ll make sure she gets it. Thank you.
Thank you for listening.
Braggy [ph] – Private Investor
Hello. My name is Braggy [ph]. I am investigator of artificial intelligence based in Palo Alto. So I have a question to Mark regarding how Facebook will maintain the information in next decade. So I’m very worrying about that Facebook might be displaced by Google Plus, if Google has correct artificial intelligence before Facebook does. And because artificial intelligence allows on their spending of pictures and videos, a way that’s rivaled human. So its Google try that first, and basically leave it how – implement that in the Google cloud, so that users of Google cloud benefit from the orders of magnitude of that a connection between people. But so far Google, it has been leading as putting one of resources into acquiring the talent in artificial intelligence, and which I believe that Facebook is lagging behind them a lot. So I wanted to ask, Mark, of what kind of a proposals do you have regarding jumping forward and to get a lead over Google in correcting artificial intelligence?
Well, I mean it’s an interesting question on a number of fronts. I mean certainly different technology platform breakthroughs present business challenges. So, the most recent one that we saw was mobile. And what we’ve seen in a lot of companies throughout the history of the technology industry is a lot of companies don’t survive these big platform transitions, right.
So if you look at, for example, Microsoft which is certainly doing well in surviving but their operating system business from Windows didn’t really continue the way that they wanted when people transitioned to using phones and tablets. And certainly other technology breakthroughs in the future will bring other challenges. And a lot of the question that we have is what are those big technology breakthrough is going to be.
AI is interesting in that people didn’t think that real AI is about to come for a very long time, and when it certainly comes, it’s going to be a quite a disruptive thing, but what we see is that there is specification applications that are much more useful, that will probably come before what you and I would consider kind of a fully artificially intelligent entity. So what we’ve said in lot of these is these different things today.
One of the things that we do is people upload and a share a lot of photos on Facebook. And the one thing that people do is they want to tag people in their photos, so that way, you can just see all the photos of David, right, or all the photos that have me and my wife in them for example. You can do that very easily when you know who are in the photos. And so we’ve been working on building really good algorithms and tools to help people tag the photos that they want.
And certainly something like that, it’s all what you would consider a big human intelligent problem and vision is one of the things that makes us human, so that we can identify people and recognize patterns if not full AI, but it’s one of the important problems that the benchmark for, that universities and different organizations use to measure how well different teams are doing at that. And I think we’re actually doing quite well with that and we’re recruiting a lot of the best people in the world including one of the leaders in AI, Yann LeCun from NYU, a bunch of folks have joined us from top universities and other top companies.
So this is one area that we’re actually investing quite heavily in, although I will be skeptical that we will see through AI within the near-term. I can build the other technological breakthroughs before that.
Braggy [ph] – Private Investor
Great. Thank you, Mark.
And if you want to apply to join our team, anyone – I’m curious, anyone in the Facebook future.
Braggy [ph] – Private Investor
I much appreciate it.
John Lynn [ph] – Private Investor
Hi. I am John Lynn [ph], individual investor. First, I’d like to commend Sheryl Sandberg and Facebook for not agreeing to participate in the anti-poaching coalition pact that was led by Apple along with Google, Adobe etcetera. I think this is a very dangerous thing that was discovered which has led to the growth of Silicon Valley in general, the free flow of tech talent and congratulations on hiring John Lagerling from Google to Facebook on the mobile business side. Definitely just wanted to wish Mark belated birthday and hope that you are now being over 30 years old and officially over the hill that you can continue to lead Facebook for decades to come. Welcome to the club. On the most serious note, in the past year, there has been a lot of media coverage on the growing income inequality and gentrification of San Francisco and Silicon Valley, will symbolize most civilized and the protest against Facebook and Google busses. I’d like to know how Facebook has been proactively engaging in the San Francisco Bay Area community, as well as other geographies that has a corporate presence in, to be a better corporate citizen. Working in the tech industry here in Silicon Valley and growing interest concerned about the perception of the industry doing a blind eye, and let them eat cake attitude that is being painted?
Unidentified Company Representative
So why don’t I take that. We take our responsibilities as a company and as a part of a community really seriously. And we’re a part where more than a billion around the world, we’re a part of lots of different communities geographically. Here in the Bay Area, we have several homes. We have lots of people who work for us in San Francisco proper. We have an active community right near our headquarters in Menlo Park. In Menlo Park in East Palo Alto, and we have lots of people who live all around the Bay Area.
So for us being a good citizen is really not just about San Francisco, it’s really about integrating in all of those community. And we’ve started pretty aggressively working, first and foremost in the community that’s closest to us in Menlo Park in East Palo Alto. We have active relationships with the city and with the local school district. And in fact if it’s been funding our local community groups through – I think it’s almost $0.5 million community fund that we’ve had in East Palo Alto in Menlo Park.
In moving further north, in Redwood City, we’ve been doing a lot of work already with the school district there. We will be doing more with the city and the community as well. We have an active team. I think Susan Gonzales is one of the people who leads that team. She is here today. Susan if you want to raise your hand, so that people can see that you’re here and she can go on quite a length in terms of detail that we do.
San Francisco obviously is really, really important. We work very closely with the mayor, with the supervisors to make sure people understand the contributions that we make. Frankly, we’ve been somewhat surprised by the response to an activity the shuttle busses that we actually think are positive environmentally are actually good for reducing congestion. And in fact some of the surveys that have been done really demonstrate that the population as a whole really appreciates that.
But because we do have an active presence with so many workers who are there, people work very closely with community groups. We have a close relationship with the Mission Economic Development Agency. We’ve been focusing on issues related to digital literacy. We’ve been doing a lot of work with non-profit groups in San Francisco and other world. I know I am going on long. We’re doing lots of things. We will do more.
And I think if you’ve heard people talk about Facebook as you hear Mark describe our vision. Our vision really is one of building community, and we want to do that not only on the side of virtual communities but also physical communities, and our employees are very engaged in that.
John Lynn [ph] – Private Investor
Craig Polo Dibona [ph] – Private Investor
Good afternoon. My name is Craig Polo Dibona [ph]. I am a local resident and individual investor. I’d like to thank Mark and the senior executives and the Board for the strong stance you’ve taken in favor to use our privacy at those times when the federal government – thank you, Mr. Jackson. At this times, when the Federal Surveillance Agency seems to have gone too far. Just this morning the U.S. House Of Representatives passed something called the USA Freedom Act. I’d like to ask, if you have an opinion on that in my own research looking at different representatives opinions. I found only one representative who posted in essay to Facebook who didn’t vote for this Act and his reasoning were not. I’d like to also why more Congress people don’t do this? If there is anything in to follow on Mark your point about it, it’s a better world and a more open – more democratic world. Is there anything Facebook or third-parties can be doing to foster legislators to share their reasoning for how they voted on bills? And I am especially interested in this, because I am actually running for state assembly, or is this different? And I have pledged to do that where I could select it and I think all elected should do this as well. Thank you.
I’ll follow up. We are already over time. So I’m going to be try to be brief, and I think we’ll probably going to have to cut off the number of questions. So we are actually pretty disappointed in the USA Freedom Act. It actually got some amendments at the end that expanded the scope of permissible government intrusion and the breath of government requests. We’ve been part of what’s called a coalition, it’s called a Reform Government Surveillance, coalition of companies, Microsoft, Google, Apple, others that have been really calling for improved transparency of government requests, limited access to government by governments to private user data, avoiding conflicts between governments where we often get caught in the middle and greater accountability within government.
It’s been really frustrating to us, how challenging it has been to get other – to get government officials to be supportive. We understand that there is a balance between national security and privacy. We think that that has been turned much too far towards security and with much too little respect for individual privacy and security than the full data. And I think Mark has been pretty outspoken about that.
So as Elliot said, we are over time. We’ll have time for two more questions.
Hayle Husley [ph] – Private Investor
My name is Hayle Husley [ph]. I live in Los Altos Hills. And I thank you for having the meeting closer to my house. But anyway I am being serious. I am sale force in ex-IBM and I was [indiscernible] and people use to bill me for – I billed people for my advice sometime and this is an awkward question I’ll throw it out to you. My thought was you just consider having a committee with some people on the Board, some in your management who boycotting Israel. And I said that only because…
Please be respectful, thank you.
Hayle Husley [ph] – Private Investor
Thank you very much.
Thank you for your contribution. We have time for only one more question unfortunately.
Rose Gackstetter [ph] – Private Investor
My name is Rose Gackstetter [ph]. I own 12,000 shares of Facebook. I am on my own. And Facebook did history in my life, or I made history because of Facebook. I do not use Facebook for anything, except I had seen pictures of my relatives through those so far. So anyway, my son came home one day, he lives in San Fran. And he said, mom, I want you to invest in Facebook in the secondary market. And I said, what is that? And he said, I’ll fill out the form for you. And I said, what’s the minimum? 100K. That’s a lot, I said. Not only that it’s 100K. When he places orders, he adds about 250,000. And I said, my gosh, they are going to be in trouble. So I poured out money from my house and which my husband had set up for me, my husband died of cancer four years ago. He is an engineer at Northrop Grumman and who had encouraged me to go to invest in stock market. He had guided me while he was alive and so I have become braver. So anyway my son did not buy the first offer that he wanted to buy at that 250,000. I was still pleased. I went back to the bank and deposited that money. And so, six months after on March, 28, 2011, he said, mom, I am going to place an order for Facebook again. And I said, okay, how much? 100K, of which that he bought. On November 2011, he said I am going to buy some more. And so I said, when you could stay more in the stock market than real estate because my husband has rental houses and apartments. And he said okay, so he bought some more of 100 – almost 110,000. And so I was under water for over two years before this. Not only that, but I became braver. Fidelity representative had offered me a 50 or 60 free trades if I put $50,000 on my account. I said I am not a day trader and I don’t think I will use all of that, but I will take it. So I did. So on your IPO I also asked Fidelity when they get my $50,000. I said I want also to have a 1,000 shares when you will get distribution from companies for you. I think they get the institutional in the first – so anyway, in your IPO I received two calls, the senior account executive at Fidelity at Sunnyvale let the message in my machine that I did not get any. The second call, my daughter [indiscernible] said, mom, I want you to buy me a 100 shares of Facebook no matter at what price. I said okay, so I did. But from your IPO, which you started at $38 I think, it went up to $45. I started buying. It bought it at $40.25. I bought at blah, blah, blah, and still you went down to I guess 1,000 shares when you was under $20. Then I became braver and so some other stocks. I bought 500 shares at $19.25. Then it went to $19, I think that’s your lowest point or under $19, I bought 250. Then I heard that stock of Facebook is going down. It’s going to go to $15. I did not tell any of my friends or relatives that I am under – that I own Facebook and I am under water. So anyway, I bought 250 and I am waiting for the $15, it never happened. I want to congratulate all of you that you have worked too hard to pull up your sacks before under water. Fidelity senior account executives told me, why did you spent too much money? And said when they – I asked them to more money, said you are putting money in a company you don’t even know where it will go. This is true. So now he told me that, you know that you are the only few Fidelity investors I know that have this many Facebook stocks, said no I do not, but my reason is that my husband who passed away had real estate that was sold. I wanted to see where do I make money or lose money, real estate or Facebook. So I did that for almost two years. I did not sell any because I am under water and I am a long-term investor. So anyway on your IPO, May 18, I think 2012, you, Mark and Sheryl, had been invited to be the guest of Mr. Charlie Rose. There was an interview I guess, he had Tumblr CEO, PayPal CEO and the third one was Mark that was interviewed. And he asked you – Charlie Rose asked you, what do you want to do this – what’s your vision? I want to connect the world. And I think he wanted to do something like that which you’ve answered. The first one that was interviewed by Charlie Rose is Marc Andreessen. I know Marc Andreessen had [indiscernible].
Madam, I’m going to ask you to – can you wind it down or do you have a question to the panel? The story is great and we certainly appreciate your confidence in the company.
Rose Gackstetter [ph] – Private Investor
In your company’s stockholders meeting last year, your stock was $24. I asked you then, is $24 a buy? And you said – and my answer was – no, we don’t know, we don’t have the crystal ball. Today your stock is $60. Is it a buy?
That’s an excellent question.
I think your story is a great way to end, because when we appreciate your faith in us. But I think more importantly we believe we have responsibility to every shareholder that once you are kind enough to join us today, but also the ones all over the world who invest in us, and to people who use our products every day. And our responsibility is very simple and very clear but we think they are important which is, we want to build a product that helps connect the world. We want to offer a product everyday that gives the people who use it really value, whether it’s the Reverend Jackson’s point of someone finding someone who has been gone for 10 years or the simple everyday things that make a birthday a special occasion or help you keep in touch with your friends. And in order to do that, we have to build a great business, and we are long-term thinkers.
We don’t promise anything in the short run, but we promise that we are going to work hard every single day to build a product that people use and build a business that enables us to grow. Thank you all for being here.
Thank you everyone for attending. Thank you for your continued support to the company and we look forward to seeing you next year.
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