Facebook 1Q16 Earnings Call Notes

Mark Elliot Zuckerberg – Founder, Chairman & Chief Executive Officer

A “foundry light?” company

“Facebook has always been a foundry-light company, so we can focus on our mission and build long-term value. This structure has served our shareholders well. Early on, we received some generous offers for companies trying to buy Facebook, and our structure helped us resist that pressure. More recently, we navigated a challenging transition to mobile. But because we were a controlled company, we were able to focus on improving the user and product experience of our apps first and then build a strong mobile business over time rather than being forced to do something shortsighted. And over the years, our structure has helped us make big bets on acquisitions like Instagram that were very controversial initially but were good decisions for our community and our business.”

Facebook was built by a series of bold moves

“Facebook has been built by a series of bold moves. And when I look out into the future, I see more bold moves ahead of us than behind us. We’re focused not on what Facebook is, but on what it can be and on what it needs to be, and that means doing bold things. A lot of what we’re building today in areas like connectivity, artificial intelligence, and virtual and augmented reality may not pay off for years, but they’re important to our mission of connecting the world. And I’m committed to seeing this mission through and to leading Facebook there over the long term.”

There are more things I want to do that connecting the world

“While helping to connect the world will always be the most important thing that I do, there are more global challenges that I also feel a responsibility to help solve to create a better world for my daughter and all future generations, things like: helping to cure all disease by the end of the century; upgrading our education system so it’s personalized for each student; and protecting our environment from climate change.”

Shareclass split allows me to fund the Chan Zuckerberg initiative

“Today’s board proposal will allow us to maintain and improve the voting structure that has served us well and allow me to fund the Chan Zuckerberg Initiative. In December, I also announced that I won’t sell more than $1 billion worth of stock – Facebook shares per year over the next three years. That’s still my commitment, and I’ll update our shareholders on future plans beyond that”

Bots allow people to interact with businesses with lower latency

“one of the good things about bots that we’ve seen is that it can decrease the amount of time that you have to wait before you get a reply back from interacting with a message. So what we’ve seen – we’ve done some research on this. A lot of people every day in Facebook today are already messaging pages and businesses directly, and the businesses respond. But what we’ve actually also found is that through some of our AI research, we can look at the responses that businesses give to common questions and can confidently provide the right reply a lot of the time. And when we can do that, then that decreases the latency. And predictably, people want to do more of that activity.”

Acquisition strategy is to find things that will be ubiquitous tools and who are the most talented people in the world to build it

“” think that people come up from time to time and suggest, should we buy this company or that. And what we look at are what are the things that we think are going to be ubiquitous tools, and who are the most talented people in the world to build this. And so when you think about something like virtual and augmented reality, that’s how we thought about that.”

We’re focused on building AI that is better than people at things like seeing, hearing, language

“So the biggest thing that we’re focused on with artificial intelligence is building computer services that have better perception than people, so the basic human senses like seeing, hearing, language, core things that we do. I think it’s possible to get to the point in the next five to 10 years where we have computer systems that are better than people at each of those things. That doesn’t mean that the computers will be thinking or be generally better, but that is useful for a number of things.”

Sheryl K. Sandberg – Chief Operating Officer & Director

Consumers have shifted to mobile and businesses know they need to catch up

“First, capitalizing on the shift to mobile. Consumers have shifted to mobile, and businesses know they need to catch up. We hear from marketers that figuring out mobile today is like figuring out TV in its early days. But given where consumers spend their time, the question now is not if they should market on mobile, but how.”

David M. Wehner – Chief Financial Officer

The new voting structure is to allow Mark to fund the Chan Zuckerberg initiative while maintaining an active leadership role at FB

“As Mark mentioned, this structure will allow for the preservation of the voting structure that has served the company well to date while allowing for Mark to fund the Chan Zuckerberg Initiative over the course of his lifetime. Importantly, as part of this proposal, the preservation of the multi-class capital structure would be generally predicated on Mark continuing to maintain an active leadership role at Facebook.’