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Ep. 109: What is Facebook going to do with all that money?Facebook filed to go public this week. It plans to see $5 billion of stock. What will Facebook do with the money? Can it continue to hold off Google? Is mobile its next major battleground? This week on the Roundtable, Rafe discusses Facebook's future...
-- Hi everyone welcome to reporters' roundtable clamoring for -- San Francisco and man what a week. The valley the whole tech industry the whole world is waiting for FaceBook to go public and it didn't -- it filed to go public which means. FaceBook put its S one registrations -- papers in with the SEC which means they can now go public only have to do the small matter of the road show. Which is -- -- in the field and telling the big institutional investors what they're selling and -- and for how much. And then nine a few months may be around may have FaceBook local public on the open public market and you and I will be able to buy stuff well not me because we can't buy stock in companies -- government. You can buy stock and we're gonna talk today. About what FaceBook is going to do with that public money that put that much money that the public spends on their stock. And out what this -- means to FaceBook the social networking to the valley in general we've got great guests in with us today first crossed from me. Josh -- Steen of tech crunch everybody. Formerly of inside FaceBook welcome back he's been on the show before talking about. FaceBook has absolutely it's good to have you back matters topic and a good -- Also serving -- of our whose a venture capitalist over at Menlo ventures and if -- and and very experienced guy in the social networking space. -- takes this whole idea of you know kind of that the peer pressure social advertising to a -- stream get a cheque at the -- of its head you can take it out if you're watching some video. That says what's the -- fab. And what else work here -- Bloomberg fatten them. And men like these are companies he has them this one has invested in and tablets a big winner of the countries you're one of the hosts of the country for -- discussion -- -- -- animal walking disclosure doesn't affect happen. If you're setting a bad precedent for the rest of the -- at the CBS are -- great confidence they see an area in the form. And -- -- -- Mexico -- so let's talk about the site feel very exciting is that what we expect them in the early rumors. Word at ten billion dollar offering on a hundred billion dollar valuation which means they're gonna sell 10% of the stock of public and what happened was somewhat less than that it. Any comments on and why it was less than we expected or. But that rumor over. Initially just over inflated. I think the -- was over inflated. But it doesn't necessarily need that much money at him. The written for don't predominately using it for. Acquisitions. Picking up the best talent that they can that's a huge problem for them because that some of the bigger companies in the valley a Google specifically as well as Microsoft -- -- Seattle have enough money to be able to throw a giant offers -- great engineers create product designers and and I and keep them from coming to FaceBook which just doesn't have as big of cash reserves. So by raising that much money title -- help -- ten billion assertive exorbitant. Now but it doesn't this company actually need to go public in order to do acquisitions and hire people -- means that FaceBook as a managing fine so far in making talent acquisitions and hiring people. And I actually I think selective if you if he had his way -- wanted to keep the company private for longer but I think they're running against. The though the -- -- the rules 500 -- rules and and that missing leaving that are being forced to go public. And that I actually I don't think that that's necessarily the reason that they went public before before I -- I want to talk about that but it but for those -- who are watching or listening who don't know about this there is found an interpretation of an ACC rule that says once you have 500. Shareholders you have to file disclosure Paper -- that. -- -- on the only reason right it was one of the main reasons and but there's some discussion over whether or not that applies in this case -- But actually we think that a a bigger reason was that. You know they had a lot of longtime employees people who have been there since the start of a company York came on relatively early as the people have been working really hard for a really long time and they haven't had any true liquidity -- -- itself. There shares on second market if they if they really wanted to. But by giving them some acquitted DV idea was it would reward these -- employees and encourage them to say in a FaceBook is really looking out for you I'm assuming that you've looked up for FaceBook this whole time. Minnesota it's -- good -- also through its gonna reverse and senators as a if you -- to actually sell for a period of time you'd have to leave the company and trying to sell your you know I have heard that in their markets and hybrid because of the way you don't wanna lose the most talented people. And that's that's that's -- fact that it would let. Do we think though that once FaceBook does actually go public that -- shares that -- even working at FaceBook for three or four years you've got a smaller you know. Fractional percent of the company. You mean the company goes public now -- shares are are worth a 1000002000005. Million dollars. Time is in the going to be a giant brain train leaving FaceBook has since the public offering happens. Com it that always happens in companies -- I mean and in the you know one of the things that I think -- On the ways to keep the most -- -- people that I think Zuckerberg is doing is is this really spend time with them has to be a leader and spend time with them -- engage them in and your life in and your vision and make them part of a mission. And of that you can look see yourself working at the many people can suddenly see themselves working at FaceBook -- you know ten year. It's down his basement isn't just about making money on a typical company in that sense it's really. And -- centered around this mission of making people more open and connected it to this long term vision that actually. Doing good for the world connecting people and sense of being very modern communications that's that's that's that's an important is what you are really today and rocketed it's not just those qualities does not mean. That is what he's had no I I I agree with I agree with that percent team and I wanted I want to ask -- -- -- -- that'll because I found that soldiers and I've seen Zuckerberg speak -- -- what FaceBook has done with this products with privacy issues and and I read his letter in the S one which is. As a jaded journalist for instance I read a site we didn't start this to become a company we didn't start just make a lot of money we started this to connect the world and I'm just re -- -- I have to. Put on my skeptical hat -- go yeah right. Well let me inspire real little I go ahead I -- I returning from but I I just came out from Libya and Egypt and -- And when I was there on your story there is you know talking about. There's some of these guys who actually fought them in these -- -- you know for the freedom against an afternoon and they specifically told me. Please thank the creators of FaceBook. Please thank them for creating FaceBook because it help them coordinate. That help them coordinate for their freedom and and so it just got real. At that you're taking my cynicism and putting a popping -- -- just popping -- -- -- -- -- But it's true -- you know it's not saying that FaceBook cause these movements but it but it did you know to them it's been an important. Goldman and fighting for their freedom so you know histories and moving incredibly fast things are changing. And in public just says I actually do see aspects of FaceBook as a public service. It is a public institution. And and -- mostly goes to wise -- -- -- the stay in control. Because you know. I think about Steve Jobs being -- on Apple and in the world probably lost about fifteen years of incredible innovation that -- Potentially -- there and that's important to keep the single from like that with this kind of deep vision and placed so -- -- And studying FaceBook obviously intensely for for several years what's your take on on the veracity of what he says -- and the emotional honesty of what what we're talking about here. I got to spend a lot of time at a lot of people who have helped build build FaceBook a lot of that the engineers a lot of the directors there. And -- they really believe it this isn't just something that that's in writing in you know China put a human face and the company they really see this as a way to make the world a better place. And there's so many aimed at applications that I you know things that are that are new that are coming out the idea of of automatic translation of comments -- that. Two people who speak different languages can actually communicate through FaceBook one comedic -- and the other can read it because it's automatically translated that's and -- -- a break down barriers geographic political racial. Religious -- -- really bring people together that otherwise they couldn't do and you know people that couldn't communicate through say -- telephone. Or television. And that you did. This would actually I think they really believe this. And there at their goal is there's never been a short term monetization if they ever wanted to do that they could easily have enlarged the sidebars of their -- -- could have made -- -- monetization much more aggressive but I haven't done that because the idea was that if you keep it if you -- the conservative and you you make it really useful first and a moneymaker second. Then you'll have a long life and you'll be able to do -- -- and. The salsa goes to the surprise that we talked about. Coast is symbolic than previous ones -- the profit being in an an exact number than one billion dollar profit -- SL -- -- -- so -- -- the S one when it came out and people are really -- picking this is where you get to pick apart -- and everything you've been wondering about is now laid bare and as you said. You can go on about well what happened millions of striking because it was -- it was basically. -- -- -- -- -- -- -- We have such. Fine tune and control over business and you want profit here's exactly one billion dollars of profit we can we continue in this up -- down whatever would -- in whatever way we want. And you know there's a tremendous upside for them. It's just that they're not trying to maximize the profit they're they're trying to grow. They're trying to build a service it's gonna be there for long term -- be sustainable. And change the world. But that one billion dollar number was pretty pretty striking for me. Now -- Before we get into more of -- surprises from yes won that one of things that a that I just -- -- -- -- studying you know history and -- business is. The truism that -- money corrupts power crops mean look at Apple to be honest and with FaceBook being a giant public company -- Zuckerberg being in such retaining such tight control of the company. -- the culture that we've just been discussing. Can and the culture survive when you've got people walking around who have. You know if you money just come and out of their. They go separate independent or walls -- 200 million dollars of stock fact that I think. -- -- health go to the and -- Sean Parker brought this in famous artists is that you know a spray thinner. To have to do -- -- all those walls and generally it is and and -- is giving and the choices and be medium be paid in money her or -- sockets at the stock in his from the guys sitting on 200 million dollars so when. When that guy has to -- -- knows those early people. You know obviously have you know variants as well so it's gonna -- hard. So -- it has a lot of these inspirational posters that are around their office and -- a new one for yesterday and says stay focused and keep shipping I needed to start on that -- -- I suppose it was on secretary's desk for I'd have another one has been around for a bit but that says keep common -- on them and the idea is that this isn't going to change the company a lot of the the things they talk about the risk risk factors and to Mark Zuckerberg -- to investors say that. A big risk is that we don't make our decisions based on on short term modernization of our cultures of rapid innovation. And of doing what's best for user engagement and that for the user experience. I and that that's their big goal with this is to take money. But maybe the reason that they didn't take as much money was to not give away as much control is really mean it that I wrote a piece few months ago when faced with when the rumors first came out I was really worried honestly answer how how greedy investors and and -- hundred billion dollar valuation -- Could hurt FaceBook. And I think that they've really taken -- of that sentiment into account on their own. To say that if if they give control to outside people who don't believe in the mission -- possible for the for there -- and -- -- and that their mission to be perverted but instead in it right in them right in the letter in the S one. They explained that if you're not on the mission if you're not aligned with our beliefs maybe you shouldn't invest because that's the goal of this company and we're here -- the long term we're here to really help people. And that if that's if your goal is just to make money there's other companies -- in Austin that sounds like an LP getting a date this is to me it's like -- Well we'll take your money but. You're not good enough for -- -- but but point taken I mean this is that it is a unique company it will give you that now let's let's talk about the financial event of going public via a filing to the public of -- S one. Serving you said one of the most interesting things in the S one -- was that the profits were him. One billion dollars and zero cents and its assessment and any other interesting disclosures. Or a numbers that came out of the S one that. That were kind of shocking or revealing. I think that that the four dollars and it was a 53 cents -- 044. Dollars and around 5050 cents. In and revenues. Per user who -- was and she -- -- that's kind of the in the in the and Mobil's another area events talk about -- -- I think that represents a great mistress in the greatest opportunity for its right and they have to invest quite a lot there. But you know for me when I look at what the potential upside is on on the revenue side and the profit side it's pretty incredible. And you know what would the insight that I've seen is that you know Cheryl. Especially as this is this focusing on the brand advertising dollars -- says that yes -- -- CEO. -- she's built a whole lab at this -- on chicken from Google. Com and what's interesting about that is you've got in hundreds of billions dollars of a brand TV advertising for example. Com and does it's harder to track the metrics of a brand advertising. Com and FaceBook doesn't give as much data and information to its advertises as as a Google -- If they win that argument that brand advertisers can reach the world right. Reach about a billion people potentially two billion people through FaceBook. And in the future if those dollars Begin the shift. You're talking about you know potentially tens of billions of dollars being shifted to FaceBook. As as the as the place where brand advertisers were actually reached reach the world and touch the world so I think. That's really interest -- because it's fundamentally different than a lot of the other. Web companies -- racing. That's a pretty gutsy pitch -- what I used to say always say when you know -- -- into the web business and that 9697. Is that the difference between advertising on the web and advertising and in broad media. Is that you can meter you can you can measure in there yet that not this -- -- meter you know exactly whatever where all your dollars are going -- -- what FaceBook is saying is they're pushing towards brand advertising which is less. It's not performance based advertising its brand advertising -- Good job but I think that there are also very much concentrating on the long tail advertisers specifically local advertisers have been added a lot of new features in their advertising -- system this year specifically zip code targeting and broad topic targeting which allows -- -- -- local advertisers are people who maybe aren't as experienced to be able to run huge quantities of AB test lots of separate campaigns instead they can just choose a a huge audience -- -- sort of -- segmented audience that likes anything to do with -- is a certain topic. And -- can advertise all of them at once which makes it a lot easier for her for local advertisers to get into the business. The same time they have a big new -- to have this huge strategy that's that's gonna be coming of age in the next few years. Not so few months ago they wash open -- applications which let you take activities say -- listening to a song reading an article. And now nine new -- new verbs such as buying something or saying that you traveled somewhere. So these actions or by your users species act these applications and share these activities back to FaceBook with their friends -- but the same time -- -- gonna make that same data available to advertisers. And that means is if five. An advertiser wants to choose for instance -- -- a concert promoter I could shoot first it -- Lady Gaga on promoting -- Lady Gaga concert. I can advertise to everyone who's -- seem to Lady Gaga on Spotify that's different people but just say they like Lady Gaga is -- people there actively engaging with their content and because of that it's. If it turns -- sort of advertising. I you know what youths with you for a needle in -- haystack -- resident and a separate shooting fish in a barrel you really know what people are are looking for the same tactics like. You Mercedes instead of just saying people who like Mercedes which could be a huge swathe of -- -- you know social economic backgrounds people who can't necessarily afford their cars they can say people who watts or people who have even bought. One of their cars previously that is the ability to re targeting -- get down to people who are very specifically. Interested in and have stated not just activity view or interest -- actual behavior around a brand that's -- -- Latin brands to get higher click through rate on their advertisements and -- much higher conversion -- So it's a fundamental -- time that I stole. The brand dollars are gonna be much bigger and so they have to they have done -- and go after broad strategy is spent. It is a touch of civilians and we talked about before which is around social search and what I call people ranked as replacing page -- And that is the -- basically you're reading people's minds their hearts -- souls what are they think similarly playing. Where the viewing what -- -- now listening to. And social search is about that FaceBook has so that has the potential. To take over Google in terms of how people discover things about their world about things that they care about -- and that's a fundamental difference. And then and the relationship that we have of Google vs FaceBook it's a very intimate relationship that we have with with face but I get to know is quite well. That is fascinating and kind of -- -- now is Google Google right now controls is the part of the purchase funnel which is demand fulfillment right right now -- -- -- brand advertising on FaceBook is only for demand generation. And -- real big goal with this new behavioral activity targeting for advertisements is to break into that demand fulfillment and say if you if you wanna sell something it's not just about generating interest in it it's about we can actually get that -- conversion you know what this is -- that's -- that peer pressure. And brand you know I like this they're my friends like this I bought it anyway we -- move -- let's talk about mobile rather it's as many -- stop -- here but mobile. Win win the S one came out we were all looking over. And looking at these incredible numbers you know that that monthly unique to 835. Million that daily unique over 400 -- this is ridiculous numbers. Half their traffic or their monthly Unix are coming for mobile more or less. A mobile is different they have no advertising and mobile the mobile apps if you ask me sucks doesn't -- the iPhone version. You don't agree -- okay whatever we'll get there but dumb. Mobile is is incredible opportunity as the world goals. Now to Smartphones a lot of people who -- getting -- line bypass the computer go straight to mobile device. Where -- FaceBook play in the mobile social. Mobile is the greatest brisk -- -- -- are returning for this but I'm I just came back from her Brazil and every single person result. You know the first thing they do they don't ask for numbers and they add each other FaceBook then and that's how they -- -- -- -- -- -- -- -- our markets -- -- -- exercise or news or month. So and the world is the start -- right now and it's it's it's a mobile start up for -- and everyone is is shifting to it. The issue is and this is what you -- I'm actually frustrated with the -- -- iPhone out. I mean I don't know which one Joss uses -- It's incredibly slow and I and -- thought about what why is this and hunt working. And you know additional five version works great even. And that's kind of interest -- it right the native app is dozen workers. In and edit and be really interest in and -- and one learning the conversion rate of people. That are going from the native app on the iPhone to an opening their browser when using the original version but -- out of power this you don't have. That the reason that's important is that if FaceBook wins the game of getting people actually start using the additional five version. That's a pretty interesting. Power play in terms of circumventing. The the actual iPhone version the IOS version of the out. And I com if in the future. You know in app purchases come into mobile. For FaceBook. If if the games that you wanna play like farm bill are living inside of the -- -- -- inside of the fee if they're living in the app. Yeah and FaceBook it's all the money in it if the living in the browser and outlook has 30% -- living in the app and Apple gets -- percent so that's the only like the all FaceBook you're sneaky here is she at all M -- I am. I'm just you know I'm speculating but I've -- I wouldn't think about -- -- art of war prospective. Like why in the world is this not work -- it takes ten seconds twenty seconds to load anything on on the -- about. That's the only explanation I -- really think. So here's the real reason that mobile is it a giant threats appears to -- so on Facebook's web interface they show ads in the sidebar. And people play games for long periods of time of its gains within their canvas pages. And a FaceBook gets to make the third their 30% tax on any in app purchases. Come with -- mobile is that right now they're not showing any advertisements and is the only time that they make. They make money is on in app purchases -- if -- through the HTML five -- they can do that right now there are in app purchases through the HMO five versions of platform applications. But here's -- -- issue. Right now more and more people are shifting from web used to mobile use -- -- is in my enticing as well there's are simply not enough room on the mobile screen to be able to show banner ads -- you know -- general display ads. FaceBook we have many people suspect that FaceBook is going to be starting to show sponsored stories ads which are basically. As they show when your friends have interacted with a brand or played an app. And net start injecting those into the news speed on mobile so they can monetize it that lame but still that's just not nearly as big Nevada and of -- monetization avenue. As their web interface has. The other -- and cockroaches. The greatest resulting in the future is. There are hurt social networks are being built from the ground up for for mobile. And there are -- DNA has all mobile. And so you look at things like conference -- -- And and you know it's a -- -- for both growing pretty well. Ends. Not to say that they're gonna replace FaceBook and anyway but. But what what I'm getting at is that being a mobile companies is fundamentally different than being a web animal -- there's there's different challenges suggest kind of make compromises we see that in some of the some of the products and some frustrations of evil or talked about. The other -- is gonna be that there is -- you know history's gonna repeat itself. There's probably going to be some kid and then it in a dorm room again the next five to seven years that does something really interest and -- and it will be on mobile. And -- -- might capture the world's attention engagement in love again. And FaceBook will buy them if they're Smart they will act they'll require them they've been doing that aggressively lately picking up the best product managers that they can. Speaking of products that they think are crucial to them -- long term success -- -- common laser on the list of people who leave and come back mean FriendFeed you know -- unless the the you do that founder and has the character of of Zuckerberg which is you know people dangled two billion dollars in front of Mark Zuckerberg and if he had taken -- The -- history be very different -- I don't know how many 27 or 24 -- -- the -- able to turn down that kind of very rare butterflies in -- that there are there are founders out there that have been inspired by -- -- -- I think. You know if if someone is out there. That is dreaming about that as young and building something interest -- it could happen again. Now via one of the other interesting things to come out of -- S want people world we're looking for -- -- -- and if it was revealed which is that Zynga. The game company which is public yet -- accounts for 12%. Of FaceBook revenues which means. That is a complicated relationship with the -- wanna talk about -- -- health Zynga and FaceBook go forward. -- -- -- -- -- I didn't Sutton started -- the -- -- -- experience. You know -- with one of the spokesman knows this firewall and at some point. In -- FaceBook. Decided to take 30% of all of the rather -- the purchases via via credits. And so that was a -- in -- time in history -- You know -- -- those making a ton of money and suddenly had to give up. 30% and and you know that obviously you could imagine this conversation -- -- but they feel to their success on the backbone to know of course of Facebook's counsel Brad is a totally deserves it clear that -- -- -- so. However you know there is only one -- on and on FaceBook. And there isn't the you know multiple using a size businesses that of the -- on it. So of FaceBook -- real problem there but it needs to deal -- to create. More successes on the platform of that scale. And that's incredibly important you can't just be a platform of one business that is making that kind of revenue. It needs to diversify it also -- ago. It it should just it it shouldn't just come from entertainment and gaming. It should also I believe come from productivity there's things like grandchild for example didn't that's building a Linkedin -- side of inside -- -- of which is quite a lot of sense. -- but is I think a next generation it in a place for it to grow as in the productivity status. It just -- What do you think Ken has Zynga maintain this relationship the and status quo or -- -- England try to pull away from FaceBook building its own social network. If sizing -- has been looking into in -- get to use easy direct or other names for basically serving their games directly to users not through the FaceBook campaigns on the -- -- that will have a lot of trouble trying to build other platform company is the size of Zynga produced in order for them to get to get as big as it was it needed massive organic by reality in the -- speed. And that was actually really bad for the user experience. For awhile it was it was crushing was flooding the news Bebo content and a lot of people didn't want to see and yes it was helping senior gain a lot of users but it would that was just balance it was -- is -- user experience for anyone who didn't really care about games. And eventually FaceBook you curtailed those viral channels -- people didn't -- more marketing to create better applications that people actually wanted to play that it wasn't just about spamming people but. FaceBook in -- it. It's gonna be difficult for them to do that again without again endangering user experience they were able to do it at a time because this was growing so quickly there is no real competitors Twitter -- -- really haven't really gotten off the ground. I've Google+ and exist and so didn't really matter if it -- if user web experience wasn't as optimal as it could have been because there was nobody there is no alternative. But now that's a lot more difficult as a lot more people sort of picking away at FaceBook a mobile on the web. And so creating other company abuses Zynga size may not be possible is really no need to diversify and -- flap. -- -- Spotify is an old believe they have the best example of -- happening and that that's and in entertainment but when. When you look today at the the new FaceBook. And the version where where you -- The feed on the right -- and suddenly all the Spotify songs that everybody was listening to some somebody were embarrassed to their listings from. You know funny funny songs and those are showing up but that that. There was incredible growth came from that for Spotify and they just pass -- three million. Subscription number which has incredible -- that's you know and thirty million dollars month and and subscriptions. Com and they're about to expand that to the whole world -- from Europe to the US so Spotify is probably the next one that will be. An incredible success are being built on top of the that is a -- -- essentially becoming the iTunes of the social world. And -- -- show that FaceBook is directly making money from Spotify. -- but you know the fact that but that. It wasn't making money from Zynga before and and and and it was able to how to leverage the field of view that there it was hill Zynga has been making FaceBook money sensing it was on the platform through advertising. That's called sanitizing that's -- present will not or it -- and there's no comparison between. There's no compares with an advertising dollars and 12% the credits that it's -- it's a massive business -- -- you can even compare it to. And are you can it's actually its its huge amount of money that was that was one of Facebook's primary revenue drivers for years -- them and advertisements and it was doing but the credit that would then mean -- that -- -- -- I think its businesses is incredibly lucrative. Or for FaceBook from Zynga -- so I'm I'm not saying they were making any money on advertising. There's the potential especially with Spotify. Is yes or making advertising dollars but then -- there you know getting a percentage potentially. Of of of credits -- when you sign up for it when you sign up for Spotify right now I'm I'm paying subscribers by I love it might that was nine and for the month. -- him you know yet. That money is all going to Spotify because I didn't use FaceBook platform and music companies can't -- well this is left by the way it's a site of one of the big differences between Zynga and Spotify. -- -- and as marginal cost per. Her. Page you were whatever is relatively low Spotify has the Paper -- the music label epic and moving on you could FaceBook. At some -- -- to Spotify look you wanna take advantage of the new social graph of the -- listen to Abbott. That's gonna cost you 30% of your subscription fees they're not doing them now could they do that -- what difference would that make -- FaceBook. Data. Actually him imagine -- when -- -- when rumors -- rumors that they were going to be launching -- music platform and music dashboard that eventually that they would be doing this that basically it would -- that yet -- that it wouldn't be enforced -- -- if somebody comes directly through FaceBook you know finds it through friends. And wants to sign up that they may be able to spend credits instead rather than having to set up a new credit card account with Spotify. Or use PayPal accounts I think you just use their same base -- credits and FaceBook mobile to make. 30% but that's not happening right now and if it doesn't seem nobody's talking about not being a huge. -- a sudden occurrence so we are. Read and edit subsite where exactly gonna -- vacant since I Spotify as I mean I haven't even seen any Spotify ads around this but so. I don't are not exactly -- -- may be more about getting FaceBook data and engagement and is about Indian money. -- move on -- been talked briefly though Google. Miss is Google a threat to FaceBook is Google and and -- Google+ a threat to FaceBook and those are two separate issues I believe. Yes -- -- -- similar products -- similar issue opposing -- so we don't Google's local puts us on Google and Google+ some -- in the risk factors that FaceBook outlined in the S 11 of the primary ones was competitors in the number one that the name was Google specifically because Google has so much money that they can throw into this war against FaceBook. That Univision and it and Google realizes that social is crucial to its advertising business via the same way that Facebook's trying to gather data about people's activity. Google wants to do the same thing. And some schools plan with Google+ is not -- -- the new speed it's not about getting a ton of people sharing content the idea's getting this identity layer underneath everyone that ties together all of your activity across all Google's products so we can say you search for maps things here you this is what kind of things you talk about your Gmail and then this is the type -- -- we're gonna -- you because of that. And now eventually if if who -- and is able to get that identity aware under enough people. Google could also start powering identity for applications for third parties so that -- necessarily have to use FaceBook. And then FaceBook -- get cut out of all that activity data and that that would be a huge my problem for placement advertising business in the future. Germany discrete and -- -- you know I think tumors or in the middle for the faced Googlers respondent to the physics -- -- -- -- who will pluses I don't see it as a threat. I think. You know yes they have tons of cash but -- this is not about. Outspending FaceBook this is about out executing FaceBook again and -- Google's been found wanting and it's been found club footed so I'm -- certainly incredibly Smart people and. Ninety million users number that they throw around as pretty impressive in such a short time when -- and that's not active users -- -- on -- daughter coming altered. President this registered people -- at some point it said -- On signing -- for Gmail account immediately Google+ account yes hundred's fifty million people are so logging in every now FaceBook him in the world's. Engagement is there and it's of the huge threatened to Google. And in depth -- are trying to win the news via -- -- about Google+ winning it's about who blows a hole in Google+ is just the identity. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But now. Android is really Macon -- Android is an incredibly popular mobile platform. There are way more products that support Android than there are IOS devices just so there's -- way more choice. It's big around the world. Couldn't Google start to bake -- -- plus into Android in a way that would blunt Facebook's mobile push. You don't you'll of the users will do the the straight to their FaceBook app for the current -- so that it doesn't matter -- it matters are now. I think it is it really does matter to not be used this sort of integrated this is doing really good job -- the big island isn't going to be active getting -- directly into -- -- the way that Twitter is an IOS now. -- -- Google+ will be an Android. Pad that's really important when somebody who takes a photo if if it first option they get is to easily share to Google+ or -- the photos app go into FaceBook and take the photo out of their photo library that's a lot of friction and some baking it into -- the OS itself. Is this is a major threat to his mistress it doesn't own a mobile platform right now they're sort of scrounging they're stuck in between Apple and an Android where Apple is is not cozying up with Twitter has its own was and so. Yet maybe that's why they may build -- no -- one -- but that's a very huge undertaking would require all application developers to get on board as well that's not so they -- do secretly you know that so many partnerships would be very public it would easily week. And everyone else -- prepare for it and I'm just not sure that. That's actually a a gate revenue or an avenue for them instead they really need to bet big on html five. But that's not gonna develop for years right now is you know five it's not as powerful as native apps that don't connect into the hardware of phones as well they don't have necessarily the same graphics power the -- -- trying to show otherwise I'd developers are quite convinced they're not quite convinced that monetization -- yet so. You know they may need to -- on each -- issue -- five but it could be years until that it comes to fruition. But we're way over time but this has been such a good discussion I wanna add -- close with one more thing which is Twitter. Another company people -- -- First -- when are they gonna start making real money with advertising secondly is there an IPO interest future -- -- if so a win would we expect to see that start to a bubble up. And I certainly hope that that's where those themselves anyway I do it's it's two in -- in many ways Twitter is as important as is -- in terms of as -- communications tool for the world and it's a fundamentally different thing than FaceBook and but I see it also -- a public service and a public institution and it should continue. I independently. From the advertising business their everything I'm hearing is as things are starting to work on the Twitter as -- potential of doing. You know 500 million dollars and in in in advertising revenue over the next couple years. Come in and so just you know what I learn as a -- -- -- -- as an investor. Is if you have a business like that it's very difficult. To do it again so someone like Jack you know. You know those square is great it's not this on Twitter is very difficult to do it again he's you know for gates are you seals -- -- -- not gonna create another FaceBook. UC EO Steve Jobs as walls like what. This thing is working give it time be patient over the next ten years Twitter will be a massive. Service and business and they can be sustainable. It's not I'm not convinced of that actually I think FaceBook is doing a really good job of boxing Twitter out right now -- subscribe kick feature and a symmetrical subscribe. Option we're basically you can follow other people and and then he -- the interest graph in to FaceBook in addition to the social graph. And while maybe it's not gonna be perfect for breaking news it's not a fire hose format it's not just a Rauf viewed so it's not as good for things that are really up to the minute. But for the general public it's gonna be good enough. Its unique enough to handle the Internet interest -- for them and there are all party on FaceBook. A lot of them marketers say I want start up on Twitter with zero followers -- rather have. Be able to just publish to FaceBook and if somebody wants to subscribe to me on an interest level instead of being my friend a let them do that do subscribe have to be. Our product and experience level it could actually dilute the essence of what FaceBook is for people so they they have to be very careful -- Man what an interest in time -- -- we're gonna have you guys back on just cut scenes is over at techcrunch covering social networking mostly FaceBook. -- in visual art is venture capitalist at Menlo ventures guys think -- so much for being a reporter's roundtable is fun. We will be back in a week with another great addition of the roundtable thank Steve for producing. Go on to cnet.com to see -- show notes here. And get links to a lot of the stories we talked about until next time thanks --