Facebook Shareholders Urge Company To Replace Mark Zuckerberg With 'Independent' Board Chair (venturebeat.com) 182
An anonymous reader shares a VentureBeat report: Facebook is being pressured by a group of shareholders seeking the removal of company chief executive Mark Zuckerberg from the board of the directors. A proposal has been put forward claiming that an independent chairperson would be better able to "oversee the executives of the company, improve corporate governance, and set a more accountable, pro-shareholder agenda." The idea for Zuckerberg's board ousting comes from Facebook shareholders who are members of the consumer watchdog group SumOfUs. The organization bills itself as an online community that campaigns to hold corporations accountable on a variety of global issues such as climate change, workers' rights, discrimination, human rights, corruption, and corporate power grab.
Pro Shareholder Agenda (Score:2, Interesting)
I'm not anti-capitalist, but I am anti publicly traded companies as they exist today. Corporations should focus on their employees and their customers, not shareholders.
Re:Pro Shareholder Agenda (Score:5, Insightful)
This can be read as "businesses should focus on their employees and their customers, not their owners".
Now, explain why, exactly, someone should buy part of a business if they're not going to get some benefit from doing so....
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At the end of the day, the customers are the real "owners," especially in a situation like facebook's. The entire reason facebook has any value is because of the equity that the end-users pour into it via time and the "donation" of their data.
Re:Pro Shareholder Agenda (Score:5, Insightful)
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Sorry, but you can't piss off and alienate a PRODUCT. A product does what you designed and built it do. They built a PaaS. The "customers" are the "owners" in that we are providing the time and effort producing all the content as well as financing the operation by impressing/clicking on ads. (No, we're not the product being sold to the advertisers...becase they're only advertising because it's profitable for them to do it with OUR personal financial investments).
Without the accounts and efforts of the end-u
Re:Pro Shareholder Agenda (Score:4, Funny)
Sorry, but you can't piss off and alienate a PRODUCT.
I take it you've never been around beef cattle before.
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Does it matter that much if you don't participate?
Putting on our tinfoil hats here - if a nefarious conspiracy were to use the nefariously collected data for nefarious purposes - if Cuckerberg has mined and sold data on everyone else in the population except you - are you really better off ?
One could argue that you'd be better off in the faceless ocean of data, protected in security by obscurity, rather than someone who sticks out as being off the grid. The nail that sticks out is the one getting the hammer
Re: Pro Shareholder Agenda (Score:1)
Customers of Facebook pay money. Do you pay money? No? You are a cow. You are the product to be milked. When I buy advertising on Facebook I'm the customer trying to get some of you cows to buy shit you don't need.
I'm a customer, you are product. Facebook is a market.
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This can be read as "businesses should focus on their employees and their customers, not their owners".
Now, explain why, exactly, someone should buy part of a business if they're not going to get some benefit from doing so....
No one's saying shareholders shouldn't get any benefit at all, only that the business shouldn't focus exclusively on them.
Re:Pro Shareholder Agenda (Score:4, Funny)
No one's saying shareholders shouldn't get any benefit at all, only that the business shouldn't focus exclusively on them.
That couldn't possibly work: no country who implemented that would have any sort of economy. Also, in unrelated news, Germany doesn't exist.
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I mean, WWII through '78 (when "shareholder supremacy" was advanced as a theory, that's how the United States worked. NB, that was a pretty awesome time from an economic growth perspective.
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So... money flowing in to their wallets are not getting a benefit?
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Facebook does not offer dividends. The only path of money into shareholder pockets is by increasing the value of Facebook stock and selling it for a net profit.
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Yes, but you can define the shareholder contract as "maximize profit while not being a dick," rather than our current context of "maximize profits at all costs and to hell with morality, conscience or even legality if we think we can get away with it."
Its not just a corporate policy problem though. Its a societal problem across the board. We, as a people, from the top of business and government all the way down to many individuals, treat money as the most important thing in the world, above lives and the
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True, but there's a wide gap between accepting that kind of behavior and encouraging it. Our modern corporate culture tends to lean strongly toward the latter.
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No customers = no shareholder value (Score:2)
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The customers are the advertisers, they are the ones that pay money to FB, and hence are FB's customers.
Your common user that has a FB account for "free", is the product that FB offers to their customer.
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I don't think it's really about ownership so much as quick trading. Stock traders often just want a quick buck, but the price for instant success could be failure in a few months or even weeks... well after the stock has been traded.
True ownership, which includes long-term investing and actual involvement in the company, might not net instant cash but would be better for the owners, the company, and even the economy.
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Well owners would be concerned with sustainable growth, and therefore they would agree that you have to focus on making the company work by having good employees and attracting customers.
One of the fundamental issues with our economic system relying on publicly traded corporations is that shareholders are not real owners. A lot of shareholders are people who only want *this quarter* to be successful so that the stock will go up, so that they can sell their shares. That's it. They're not necessarily inte
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It could be read that way. But it is not that way. A shareholder is not an "owner". They hold shares. The words are different words for a reason.
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This can be read as "businesses should focus on their employees and their customers, not their owners".
Now, explain why, exactly, someone should buy part of a business if they're not going to get some benefit from doing so....
Shareholders shouldn't get anything more than a share of profits relative to their share of shares. Just because you've put a bit of money in a company (alongside thousands to millions of other people) doesn't mean you should get a say in anything. If you don't like what the company is doing take your shares out. Fair enough shareholder meetings where they put their views to the company are a good thing but the company shouldn't be beholden to anything.
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Just because you've put a bit of money in a company (alongside thousands to millions of other people) doesn't mean you should get a say in anything.
Surely you’re not so dense that you don’t understand that what you wrote doesn’t actually reflect reality, though, right?
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This can be read as "businesses should focus on their employees and their customers, not their owners".
Now, explain why, exactly, someone should buy part of a business if they're not going to get some benefit from doing so....
Shareholders shouldn't get anything more than a share of profits relative to their share of shares. Just because you've put a bit of money in a company (alongside thousands to millions of other people) doesn't mean you should get a say in anything. If you don't like what the company is doing take your shares out. Fair enough shareholder meetings where they put their views to the company are a good thing but the company shouldn't be beholden to anything.
For companies that don't issue dividends (like Facebook), they don't distribute a share of their profits to their shareholders, so the only way an "investor" can profit from money invested in shares is to trade their shares to someone else to generate a return. Also in most states (including Delaware where most US corporations are domiciled), have the requirement that controlling shareholders and boards of directors have a specific fiduciary duty to minority shareholders (e.g., has to act for the benefit o
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Shareholders shouldn't get anything more than a share of profits relative to their share of shares. Just because you've put a bit of money in a company (alongside thousands to millions of other people) doesn't mean you should get a say in anything.
Exactly! Businesses should look to Slashdot for advice rather than people that are invested in their company.
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So then, who should control? Shareholders (think: retirees for the most part) might actually have a soul or conscience. Non-founder CEOs are selected on the basis of sociopathy alone. Do you really want no checks and balances on the CEOs?
If you don't want to cede control, don't go public, or offer a limited partnership or preferred stock instead of common stock. But investors are more willing to part with their money when they get some sense of control, so you won't cash out as big that way.
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This can be read as "businesses should focus on their employees and their customers, not their owners".
Now, explain why, exactly, someone should buy part of a business if they're not going to get some benefit from doing so....
Investing in an organization that maintains proper focus is critical, because it takes far more than a Board of Directors or majority shareholder to run a profitable company.
Without proper focus on customers, there is no maintaining the revenue. Without revenue, there is no company.
Without proper focus on employees, there is no maintaining the product. Without a product, there is no company.
I don't expect focus to be put on me as a shareholder. I expect focus to be put on the components that make my inve
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False dilemma. You can get some benefit without only your benefit being considered.
Corporations are an Abomination (Score:4, Insightful)
Ah, yes. Just like copyright law, the laws governing corporations are an abomination and perversion of what was originally intended.
In the beginning:
What the hell happened? Corporations made TONS of money off of the Civil War (Military-Industrial Complex?). Corporations bought influence and successfully eroded the protections given to the people by the founders and the states from such corporations as the East India Company.
Yes, I know we like to ridicule the founders as not being worthy of the pedestal they've been placed on. But they got a lot of things right that got royally screwed up over time. Corporations were not intended to be given power with the singular purpose of making money. They were intended to be given power to fulfill a purpose, and then dissolve when the purpose was fulfilled, or no longer necessary. The corporation would cease to exist if it violated any laws, and the people running the corporation would be held accountable for those actions. Almost sounds like a utopia.
Re:Pro Shareholder Agenda (Score:4, Insightful)
Adam Smith warned against granting corporate charters unless it was absolutely necessary. In theory, the cornerstone of a charter is to be the public good. If enforced, that may mean not maximizing shareholder value. But then, they knew that going in.
Absentee ownership of business coupled with no liability is a terrible way to organize an economy.
Re: Pro Shareholder Agenda (Score:1)
Shareholders think they know best.
Therefore shareholders want to control, freaks as they are.
The original owner of the company asked the shareholders to invest money to a larger extent then he himself has invested in it, therefore the shareholders own the company more than the original owner.
Therefore they decide.
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And that's what companies are doing; but they are doing it in an economically rational way: they charge customers the maximum they can get away with and pay employees the minimum they can get away with.
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I can't believe you forgot to mention the pension fund, and what a fantastic cash source it is.
Re:Pro Shareholder Agenda (Score:5, Interesting)
Yup. Any agenda put forth by share holders with political goals in mind should be shut down hard.
Being political with your business is a great way to win over the worst kinds of customers, tick off governments, and offend/lose your core user base.
How about Facebook sticks to being a social network?
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If this move could help put facebook out of business, I fully support it myself.
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Yup. Any agenda put forth by share holders with political goals in mind should be shut down hard.
It's their company, they can do whatever they want with it. Why are you opposed to individuals exercising their rights? What kind of fascist are you, anyway?
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You forgot the /s tag.
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Well.... unless it is politics that you agree with...
Would you hold the same view if the political goal was widely accepted by 90% or more of the public?
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I agree with many of the things they're in support of. I also don't think they should be allowed to run facebook, a social network, as if it's a activism network.
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Why? Shareholders are the owners of the company; they can do whatever they want with the company, within the limits of the corporate charter (=their mutual legal obligations).
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There's a vast canyon between what they "can" do and what they "should" do. I'm not talking about what they can or can't do. I'm talking about what they should or shouldn't do.
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You said "should be shut down hard", implying that some external agency come in and tell company owners to do with their private property. What possible justification is there for that?
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In looking at FB's operations and returns, Zuckerberg most definitely completed a power grab and returns are below what they should be. I'm all for that being corrected.
The political goals of the group are BS though.
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It was something like that. I remember being rather surprised that anyone would buy in on those terms but hey, look, a unicorn!
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Corporations should act in the public interest. Otherwise there is literally no reason for them to exist [reclaimdemocracy.org].
Remember, the Constitution affirms the right to assemble, but it does not affirm some imaginary right to do so and then demand special legal treatment to limit liability!
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The problem being that "public interest" is so nebulous a term that it can be defined in almost any way you like. Some might argue that allowing people to assemble and form an organization that limits owners' liability does further the public good, by allowing money to flow more freely and giving those people a certain base level of protection from prosecution for actions that they may have taken no part in. And let's remember here that "limited liability" means just that, it is not unlimited, and really it
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I'm not anti-capitalist, but I am anti publicly traded companies as they exist today. Corporations should focus on their employees and their customers, not shareholders.
Are you sure? That seems like it is nearly the definition of anti-capitalist.
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And how exactly would you have a capitalist economy without markets that would allow you to buy an ownership stake in a company? Without a stock market, finding shares you can buy for investment, or finding buyers for your shares, would be insanely inefficient. I would say some sort of trading market is absolutely inevitable in any capitalist economy.
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Fuck me for saying so, but MightyMartian has a point.
The definition of capitalism is that control of capital is obtained by buying it (as opposed to systems that base it on military victory, or political favoritism). Large projects require more capital than any one owner will provide, so you need a system of partial ownership. Call that what you want, but any combination of "able to buy partial ownership" is a stock market.
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Exactly, and if you want any efficiency in being able to buy and sell ownership and debt, you have to have some sort of market. As someone who is a part owner in a private corporation, I can tell you that there's a lot of bloody paperwork (read: lawyers and accountants fees) every time there's a share transfer. That works fine because the company is relatively small and the shareholder pool pretty static, but in a large company if every share transaction had to involve that level of work it would cost milli
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Well yes there were, mercantilism is somewhat distinct from capitalism. If you're talking about a mercantile economy, then so be it, but in reality even in Roman times, even before the empire, there were societies where ownership stakes could be purchased, and certainly by the Renaissance and Early Modern Period the first modern banks evolved, and with entities like the Dutch East India Company, you would the first truly modern stocks. Privately-held companies are essentially what you are talking about, and
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Irony Level: Master (Score:5, Insightful)
Wilful ignorance level: Master (Score:1)
Do you honestly believe that characterisation? Considering shareholders third party is strange.They are owners of the business.
Moreover, just because he's founder don't mean shit if he's blowing it. They think he is.
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Blowing it - as the director of the company - would mean he is doing things that cause FaceBook to lose money. Is that what SumOfUs is complaining about?
From the summary, I'm guessing 'No'. They seem to be against him b'cos he's not on the same page as them on issues such as climate change, workers' rights, discrimination, human rights, corruption, and corporate power grab. But if a company wants to be dedicated to those things, they should be private and carefully distribute ownership only to p
99% of signers aren't shareholders (Score:5, Informative)
99% of the people who signed the request aren't shareholders, and 99% of shareholders didn't sign the request. The overlap between this third-party group and Facebook shareholders is small. Since there *are* a few people in both groups, they were able to officially file the proposal.
In just the last three months, there have been 23 million purchases of Facebook stock. That's probably fairly close to the number of Facebook stockholders - tens of millions. 1500 are part of this activist group.
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Not all share holders are created equal. Their are millions of owners of FB stock, but thier are a handful that together control a majority..
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Not all share holders are created equal. Their are millions of owners of FB stock, but thier are a handful that together control a majority..
True. But only those handfuls which include Mark and Priscilla control a majority since they control 51% of the voting shares. This is what this whole thing is about...
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99% of the people who signed the request aren't shareholders, and 99% of shareholders didn't sign the request. The overlap between this third-party group and Facebook shareholders is small. Since there *are* a few people in both groups, they were able to officially file the proposal.
In just the last three months, there have been 23 million purchases of Facebook stock. That's probably fairly close to the number of Facebook stockholders - tens of millions. 1500 are part of this activist group.
Actually, it's closer to 99.5%. From TFA:
333,000 people signed the petition requesting Facebook improve its corporate citizenship, but 1,500 were actual shareholders in the company.
Your sig (Score:2)
Your sig, "The Daddy casts sleep on the Baby. The Baby resists!", would have really made me laugh last night.
Is that a quote from somewhere?
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They are part owners of the business and associated with a third party activist group. Whether their proposal has any chance of passing depends on how the company is organized, what the majority of shareholders want. In this case, the proposal seems like an empty gesture.
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Considering shareholders third party is strange.
The group wanting to alter the board of directors by tossing out the company's founder are NOT all FB shareholders. Which you know, but are trying to pretend you don't.
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I know right haha that's seriously retarded level marketing. I'll wager that the CEO of SumOfUS is a certifiable psychopath.
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Third party organization wants to oust founder of company from board of directors because of their activism in the area of "power grab."
Actually, it's more like Liberal Activists want to oust founder of company from board of directors b'cos despite his own Liberal bent, he decided to listen to conservative subscribers who had issues w/ the way Facebook censored some of their voices
While I normally support the rights of a founder to run an organization any way he pleases, I'm somewhat gleeful at this Alien vs Predator show
Shareholders are Powerless (Score:5, Informative)
That's not really true. They just want to get 'some' power. The problem with many of these new unicorn tech businesses is that buying a share does not give you any useful voting rights in the company's operation. People like zuck hold share classes that basically means he can out vote everyone even though he doesn't own much of the business. This isn't really healthy and has set a precedent which many other tech companies are all to happy to follow.
You might say that nobody has to buy the shares. That's true, but again, I don't think this is something we want to see become the norm, which is what is happening now. It's a bit like when govts pass surveillance laws for a specific situation, and when people complain they say 'hey it's not going to affect you, it's just this special case, don't worry' and then ten years later they are using those laws to keep the population in check. These super share classes are fine when the companies act like regular companies, but as soon as it is widespread, there are just so many ways in which the unicorns can screw their shareholders, it could get really really nasty.
You also have to wonder whether it would be healthy to end up in a situation where 70% of the shareholders cannot stop the CEO from doing something they all don't want him to do. Because that is really the only situation where Zuckerberg needs his super shares, so what does he think he might want to do that would require this sort of power?
Personally, I think markets need counterbalancing forces, and this is one of them, even though it will probably fail.
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Just because someone buys a few shares, does not mean they have any idea how to run a company. Their is no human right that forces all shares to be voting shares, and their is no reason to believe that some stock market player has a better idea on how to run a business than the founder.
Re:Shareholders are Powerless (Score:5, Interesting)
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Yes, good point, that is certainly a problem. However, I would counter that these modern unicorn companies that are built around the cult-of-founder are the least likely to suffer from that sort of problem anyway. Regular, medium sized, diversified ownership companies that the raiders target can't really use super shares to protect themselves, as it wouldn't be clear who should have the super shares.
I'm not saying share classes don't have a place, but I do think that the CEO's in american public companies a
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Why not? If it turns out to be a better way of running companies, it will succeed. If not, it will fail.
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Pity, because he was could make his own shoes.
lol (Score:2, Insightful)
You knew what you were getting when you bought the shares, King Zuck doesn't give a rat's ass what you want.
Conflicting Goals (Score:5, Insightful)
and
"global issues such as climate change, workers' rights, discrimination, human rights, corruption"
seem like seriously conflicting goals.
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Unless the company were private, in which case there wouldn't technically be 'shareholders'. Seriously, if they want a company focused more on those 'global issues', they should keep the company private, and make it clear to their customers that their goal is not so much to sell a product or service, but to raise money for their pet issues w/o going into the red doing it
You can actually have a non-private company that does that. The company merely has to incorporate as a "B" or Benefit corporation [wikipedia.org]. However, Facebook was constituted under more traditional "C" corporation rules which means the board, under fiduciary rules, must only consider the impact on the share holders, not some other beneficial goal.
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Just a catch-all, so they can always claim some sort of activism to be their focus, or something.
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"pro-shareholder agenda" and "global issues such as climate change, workers' rights, discrimination, human rights, corruption" seem like seriously conflicting goals.
Communists are like that.. .
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Not a fan of Zuck, but (Score:1)
The only thing I hate more than the idea of Facebook headed by the narcissistic Zuckerberg is the idea of a Facebook headed by a sociopathic panel of faceless suits.
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Nah - this crew sounds like it wears poor-fitting hemp clothing instead. It's THEIR parents who wear the suits (and own the basements from which they tweet).
i dislike Zuck but... (Score:1)
he started the thing, took it public, and last I saw, was making a pretty damn good profit for the shareholders. Its no wonder there are fewer public companies now than in years past, why go public and deal with asshole bankers who think they know your business?
Political Agenda Driven Companies? (Score:4, Insightful)
Funniest thing I've heard all day! (Score:2)
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Zuckerberg probably knows that he's a one trick pony and doesn't have it in him to do anything else. Furthermore, Facebook is a huge media empire and an ideal power base for his political ambitions.
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If I had anywhere near that amount of money and a drive to continue working, I'd at least go Elon Musk and continually pivot towards anything that interested me or would push the world forward.
Arguably, that's what he does. The things that interest you (or me) are different than the things that interest him, though.
I honestly don't understand why all these people stick around so long. I know, they see it as their baby and don't want to leave it, but it can't really be fun to keep doing the boring business stuff day in and day out.
The feeling of accomplishment is addicting. Plus power.......it's like playing video games, except it's real so it's better.
Shoulda (Score:2)
If the independent board committee wanted to run Facebook then it should have invented Facebook.
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I was just making a reference to the stupid Facebook movie. I don't actually give a fuck, asshole.
In other words (Score:3)
GoodLuckWThat (Score:2)
Good, let it die. (Score:2)
Not my cup of tea (Score:2)
I don't like facebook at the moment, I think it's too focused on a novelty market, which isn't my cup of tea, sadly this is what happens when something grows too big. Too many smilies for my liking. When it was plain text I was ok with it. Anyway, that's just my disagreements.
Mark built the company. What gives anyone the right to put someone else in his place? If you want to be in the facebook club and buy shares, then play by the rules of the club when you joined, don't go crying because you've not seen th
Irony is not lost. (Score:2)
The organization bills itself as an online community that campaigns to hold corporations accountable on a variety of global issues such as climate change, workers' rights, discrimination, human rights, corruption, and corporate power grab.
As they power grab to promote their own political agenda.
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Re:remove zuck ... forcibly (Score:5, Insightful)
Start a competitor and put him out of business, like Zuck put MySpace and Friendster out of business.
Oh wait. That's what a serious person willing to back up his mouth with action would do. Not you.
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